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EOG Resources (EOG) Q2 Earnings Miss Estimates, Revenues Beat
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EOG Resources Inc (EOG - Free Report) delivered second-quarter 2019 adjusted earnings per share of $1.31, which missed the Zacks Consensus Estimate of $1.33 and declined from the year-ago $1.37. The underperformance was mainly because of lower price realization for crude oil and condensates, and higher lease and well operating expenses.
Total revenues in the quarter rose 10.8% year over year to $4,698 million. Moreover, the top line beat the Zacks Consensus Estimate of $4,403 million, thanks to the surge in oil equivalent volumes.
Operational Performance
In the quarter under review, EOG Resources’ total volume rose 16% year over year to 74 million barrels of oil equivalent (MMBoe).
Crude oil and condensate production in the quarter totaled 455.7 thousand barrels per day (MBbl/d), up 18% from the year-ago quarter level. Natural gas liquids (NGL) volumes increased 16% year over year to 131.1 MBbl/d. Natural gas volumes rose to 1,356 million cubic feet per day (MMcf/d) from the year-earlier quarter’s level of 1,228 MMcf/d.
Average price realization for crude oil and condensates fell 10% year over year to $60.99 per barrel. Quarterly NGL prices declined 44% from $27.86 in the year-ago quarter to $15.63 per barrel. Moreover, natural gas was sold at $2.19 per thousand cubic feet (Mcf), representing a decline of 19% year over year.
Operating Cost
Total operating cost increased to $3,566.9 million from $3,273.1 million a year ago. Lease and Well expenses increased 10.4%, while exploration costs declined 31.5%.
Liquidity Position
At the end of the second quarter, the company had cash and cash equivalents of $1,160.5 million and long-term debt of $4,165.3 million. This represents a net debt-to-capitalization ratio of 16%.
During the quarter, the company generated $2.1 billion in discretionary cash flow, nearly the same as the year-ago comparable quarter.
Guidance
For 2019, the company expects crude oil equivalent volumes in the range of 793.8-822.6 thousand barrels of oil equivalent per day (MBoE/D). For the third quarter of 2019, the company expects crude oil equivalent volumes in the band of 794-831.1 MBoE/D. Moreover, the company projects capital budget in the range of $6.1-$6.5 billion for 2019.
Zacks Rank & Stocks to Consider
EOG Resources currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include MPLX LP (MPLX - Free Report) , Oasis Midstream Partners LP and Plains Group Holdings, L.P. (PAGP - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
MPLX is likely to see earnings growth of 23.6% through 2019.
Oasis Midstream has an average positive earnings surprise of 0.3% for the past four quarters.
Plains Group is likely to see earnings growth of 7.6% through 2019.
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EOG Resources (EOG) Q2 Earnings Miss Estimates, Revenues Beat
EOG Resources Inc (EOG - Free Report) delivered second-quarter 2019 adjusted earnings per share of $1.31, which missed the Zacks Consensus Estimate of $1.33 and declined from the year-ago $1.37. The underperformance was mainly because of lower price realization for crude oil and condensates, and higher lease and well operating expenses.
Total revenues in the quarter rose 10.8% year over year to $4,698 million. Moreover, the top line beat the Zacks Consensus Estimate of $4,403 million, thanks to the surge in oil equivalent volumes.
Operational Performance
In the quarter under review, EOG Resources’ total volume rose 16% year over year to 74 million barrels of oil equivalent (MMBoe).
Crude oil and condensate production in the quarter totaled 455.7 thousand barrels per day (MBbl/d), up 18% from the year-ago quarter level. Natural gas liquids (NGL) volumes increased 16% year over year to 131.1 MBbl/d. Natural gas volumes rose to 1,356 million cubic feet per day (MMcf/d) from the year-earlier quarter’s level of 1,228 MMcf/d.
Average price realization for crude oil and condensates fell 10% year over year to $60.99 per barrel. Quarterly NGL prices declined 44% from $27.86 in the year-ago quarter to $15.63 per barrel. Moreover, natural gas was sold at $2.19 per thousand cubic feet (Mcf), representing a decline of 19% year over year.
Operating Cost
Total operating cost increased to $3,566.9 million from $3,273.1 million a year ago. Lease and Well expenses increased 10.4%, while exploration costs declined 31.5%.
Liquidity Position
At the end of the second quarter, the company had cash and cash equivalents of $1,160.5 million and long-term debt of $4,165.3 million. This represents a net debt-to-capitalization ratio of 16%.
During the quarter, the company generated $2.1 billion in discretionary cash flow, nearly the same as the year-ago comparable quarter.
Guidance
For 2019, the company expects crude oil equivalent volumes in the range of 793.8-822.6 thousand barrels of oil equivalent per day (MBoE/D). For the third quarter of 2019, the company expects crude oil equivalent volumes in the band of 794-831.1 MBoE/D. Moreover, the company projects capital budget in the range of $6.1-$6.5 billion for 2019.
Zacks Rank & Stocks to Consider
EOG Resources currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include MPLX LP (MPLX - Free Report) , Oasis Midstream Partners LP and Plains Group Holdings, L.P. (PAGP - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
MPLX is likely to see earnings growth of 23.6% through 2019.
Oasis Midstream has an average positive earnings surprise of 0.3% for the past four quarters.
Plains Group is likely to see earnings growth of 7.6% through 2019.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
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