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Apache (APA) Q1 Earnings Beat on Permian Growth, Oil Price
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U.S. energy firm Apache Corporation (APA - Free Report) reported first-quarter earnings per share – excluding one-time items – of 32 cents, ahead of the Zacks Consensus Estimate of 26 cents and the year-ago adjusted profit of 8 cents. The outperformance stems from higher oil realizations and greater-than-expected volumes from the key Permian Basin region.
Revenues of $1,742 million were above the Zacks Consensus Estimate of $1,648 million but was 7.2% below the first-quarter 2017 sales of $1,878 million.
Production Growth, Higher Selling Prices
The production of oil and natural gas (excluding divested assets and non-controlling interests) averaged 366,965 oil-equivalent barrels per day (BOE/d) (67% liquids), up 6% from last year. Apache’s production for oil and natural gas liquids (NGLs) was 247,035 barrels per day (Bbl/d), while natural gas output came in at 719,565 thousand cubic feet per day (Mcf/d).
In the company's Permian Basin acreage, average production volumes improved to a record 182,972 BOE/d from 146,448 in the first quarter of 2017. Results were also above the Zacks Consensus Estimate of 177,000 BOE/d, helped by operational progress and the high quality of Apache’s inventory. For 2018, the company forecasts its Permian resources to continue the high-return growth.
The average realized crude oil price during the first quarter was $64.27 per barrel, representing an increase of 25.5% from the year-ago realization of $51.20. Moreover, the average realized natural gas price during the March quarter of 2018 was $2.77 per thousand cubic feet (Mcf), up 1.1% from the year-ago period.
Apache increased its 2018 annual production guidance to 250,000-258,000 BOE/dfrom 245,000-255,000BOE/d, representing annual production per share growth of 14%. The expected improvement in this year’s volume is driven by higher number of operating wells in the first quarter.
Apache Corporation Price, Consensus and EPS Surprise
Balance Sheet, Capital Spending & Lease Operating Expenses
As of Mar 31, 2018, the oil giant, with a market capitalization of just over $15 billion, had approximately $1,077 million in cash and cash equivalents. The company had long-term debt of $7,936 million, representing a debt-to-capitalization ratio of 51.4%.
During the oil rout, Apache– like many other oil and gas players including ConocoPhillips (COP - Free Report) and Marathon Oil Corporation (MRO - Free Report) – aligned its spending plans with the low-price environment.
But Apache has since then increase its capital investment after achieving cost rationalization. With returns-focused growth in mind, Apache shelled out $3,089 million in 2017, representing a 75% increase over its 2016 spend. Keeping with the company’s planned shift in strategic objective, Apache’s guidance for oil and gas investments for this year remains unchanged at $3,000 million.
Apache’s first-quarter lease operating expenses totaled $349 million, up 3.9% from the year-ago quarter. Moreover, total operating expenses edged up 1% from the corresponding period of 2017 to $1,354 million.
Zacks Rank & Stock Picks
Apache currently retains a Zacks Rank #3 (Hold).
Meanwhile, one can look at a better-ranked energy player like Wildhorse Resource Development Corporation (WRD - Free Report) - a Zacks Rank #1 (Strong Buy) stock.
Wildhorse is a company focused on the acquisition, development, exploration and operation of unconventional, onshore oil and gas properties in the northeastern end of the Eagle Ford Play in South Texas. The 2018 Zacks Consensus Estimate for this Houston, TX-based company is $1.67, representing some 288.4% earnings per share growth over 2017. Next year’s average forecast is $2.19, pointing to another 31.4% growth.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Apache (APA) Q1 Earnings Beat on Permian Growth, Oil Price
U.S. energy firm Apache Corporation (APA - Free Report) reported first-quarter earnings per share – excluding one-time items – of 32 cents, ahead of the Zacks Consensus Estimate of 26 cents and the year-ago adjusted profit of 8 cents. The outperformance stems from higher oil realizations and greater-than-expected volumes from the key Permian Basin region.
Revenues of $1,742 million were above the Zacks Consensus Estimate of $1,648 million but was 7.2% below the first-quarter 2017 sales of $1,878 million.
Production Growth, Higher Selling Prices
The production of oil and natural gas (excluding divested assets and non-controlling interests) averaged 366,965 oil-equivalent barrels per day (BOE/d) (67% liquids), up 6% from last year. Apache’s production for oil and natural gas liquids (NGLs) was 247,035 barrels per day (Bbl/d), while natural gas output came in at 719,565 thousand cubic feet per day (Mcf/d).
In the company's Permian Basin acreage, average production volumes improved to a record 182,972 BOE/d from 146,448 in the first quarter of 2017. Results were also above the Zacks Consensus Estimate of 177,000 BOE/d, helped by operational progress and the high quality of Apache’s inventory. For 2018, the company forecasts its Permian resources to continue the high-return growth.
The average realized crude oil price during the first quarter was $64.27 per barrel, representing an increase of 25.5% from the year-ago realization of $51.20. Moreover, the average realized natural gas price during the March quarter of 2018 was $2.77 per thousand cubic feet (Mcf), up 1.1% from the year-ago period.
Apache increased its 2018 annual production guidance to 250,000-258,000 BOE/dfrom 245,000-255,000BOE/d, representing annual production per share growth of 14%. The expected improvement in this year’s volume is driven by higher number of operating wells in the first quarter.
Apache Corporation Price, Consensus and EPS Surprise
Apache Corporation Price, Consensus and EPS Surprise | Apache Corporation Quote
Balance Sheet, Capital Spending & Lease Operating Expenses
As of Mar 31, 2018, the oil giant, with a market capitalization of just over $15 billion, had approximately $1,077 million in cash and cash equivalents. The company had long-term debt of $7,936 million, representing a debt-to-capitalization ratio of 51.4%.
During the oil rout, Apache– like many other oil and gas players including ConocoPhillips (COP - Free Report) and Marathon Oil Corporation (MRO - Free Report) – aligned its spending plans with the low-price environment.
But Apache has since then increase its capital investment after achieving cost rationalization. With returns-focused growth in mind, Apache shelled out $3,089 million in 2017, representing a 75% increase over its 2016 spend. Keeping with the company’s planned shift in strategic objective, Apache’s guidance for oil and gas investments for this year remains unchanged at $3,000 million.
Apache’s first-quarter lease operating expenses totaled $349 million, up 3.9% from the year-ago quarter. Moreover, total operating expenses edged up 1% from the corresponding period of 2017 to $1,354 million.
Zacks Rank & Stock Picks
Apache currently retains a Zacks Rank #3 (Hold).
Meanwhile, one can look at a better-ranked energy player like Wildhorse Resource Development Corporation (WRD - Free Report) - a Zacks Rank #1 (Strong Buy) stock.
(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)
Wildhorse is a company focused on the acquisition, development, exploration and operation of unconventional, onshore oil and gas properties in the northeastern end of the Eagle Ford Play in South Texas. The 2018 Zacks Consensus Estimate for this Houston, TX-based company is $1.67, representing some 288.4% earnings per share growth over 2017. Next year’s average forecast is $2.19, pointing to another 31.4% growth.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>