Energen (EGN) Beats Earnings And Revenue Estimates In Q3

Energen Corporation (NYSE:EGN) reported third-quarter 2018 adjusted earnings from continuing earnings of 96 cents per share, beating the Zacks Consensus Estimate of 85 cents and improving from the prior-year quarter’s 20 cents.

Revenues of $381 million steered past the Zacks Consensus Estimate of $365 million and improved from $249.1 million in the year-ago quarter.

The strong third-quarter results were supported by a surge in oil equivalent production and crude price realization.

Production Raises

Total production volumes for the July-to-September quarter of 2018 increased to 9,489 thousand barrels of oil equivalent (MBOE) from 7,483 MBOE in the prior-year quarter, courtesy of strong well operations as more wells in the Midland and Delaware basins came online. Of the total volume, oil accounts for 58.6%.

The company recorded oil production of 5,562 thousand barrel (MBbl), higher than 4,510 MBbl in the year-ago quarter. Natural gas production also increased to 11,934 million cubic feet (MMcf) from 9,174 MMcf.

Price Realization (Excluding Effects of All Derivative Instruments)

Average realized price for oil jumped from $45.07 a barrel in third-quarter 2017 to $56.82. However, realized natural gas prices fell to $1.29 per thousand cubic feet (Mcf) from $2.22 in the year-ago quarter.

Operating Cost Increases

Through the third quarter of 2018, the company’s total operating cost and expenses surged by almost $37.1 million to $246.6 million. The jump in expenses associated with oil, natural gas liquids and natural gas production was $10.5 million, primarily attributable to the rise in operating costs.

Balance Sheet & Capital Spending

As of Sep 30, 2018, the company had approximately $17.1 million in cash and cash equivalents. The company had long-term debt of $953.2 million, representing a debt-to-capitalization ratio of 20.9%.

Through the July-to-September quarter of 2018, the company spent $396.9 million that includes expenditures for acquisitions.

Zacks Rank and Other Stocks to Consider

Energen currently carries a Zacks Rank #2 (Buy). Other prospective players in the energy space areHess Corporation (NYSE:HES) , Murphy Oil Corporation (NYSE:MUR) and Petroleo Brasileiro S.A. or Petrobras (NYSE:PBR) . While Hess sports a Zacks Rank #1 (Strong Buy), Murphy and Petrobras carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hess beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 230.5%.

Murphy has an average four-quarter positive earnings surprise of 96.5%.

Petrobras’ bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters.

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