Narrower-than-Expected Q4 Loss at WPX Energy

Zacks

Independent oil & gas operator WPX Energy Inc. (WPX) reported an operating loss of 34 cents in the fourth quarter, narrower than the Zacks Consensus Estimate loss of 36 cents. However, the operating loss of WPX Energy was wider than the 20 cents incurred in the comparable year-ago quarter.

On a GAAP basis, WPX Energy reported a loss of $4.85 per share versus a loss of 53 cents in the year-ago quarter. The difference between the GAAP and operating number in the reported quarter was due to a one-time after tax impact of asset impairments, accruals for litigations and unrealized mark-to-market losses.

2013 loss was $1.22 per share, marginally narrower than the Zacks Consensus estimate of $1.23 but much wider than year ago loss of 62 cents per share. GAAP loss in the year was $5.91 versus a loss of $1.23 in the year ago period.

Total Revenue

WPX Energy’s quarterly revenues of $657 million surpassed the Zacks Consensus Estimate of $641 million by 2.5%. Total revenue was lower than the year-ago revenues of $827 million by 20.6%. The decline was primarily due to lower natural gas sales.

2013 total revenue was $2.8 billion, 10.9% higher than the Zacks Consensus Estimate of $2.49 billion and also down from $3.2 billion in the prior year by 13.4%.

Highlight of the Release

Total average daily production in fourth quarter 2013 was 1,237 million cubic feet equivalent per day (MMcfe), down 7.0% from 1,336 MMcfe in the year-ago quarter. Oil production in the reported quarter went up, while natural gas and NGL production trended down.

Total expenses in the reported quarter were $2.1 billion, up 128.4% from the year-ago level. The significant increase in expenses was due to the inclusion of impairment charges of $1.03 billion in total expenses.

Interest expenses in the reported quarter were $26 million increasing by $1 million from the year-ago quarter.

Financial Update

WPX Energy exited the quarter with $99 million cash and cash equivalents versus $153 million in the year ago level.

Net cash from operating activities for full year 2013 was $636 million versus $796 million in 2012.

Capital expenditure of the company during 2013 was $1.15 billion versus $1.52 billion in 2012.

Long-term debt as of Dec 31, 2013 was $1.9 billion versus $1.5 billion as of Dec 31, 2012.

Other Company Releases

Goodrich Petroleum Corp. (GDP) posted a loss of 57 cents per share in fourth quarter 2013, wider than the Zacks Consensus Estimate loss of 48 cents.

SM Energy Co’s (SM) fourth-quarter 2013 adjusted earnings of $1.26 per share fell short of the Zacks Consensus Estimate of $1.43 by 11.9%.

Chesapeake Energy Corp’s (CHK) fourth-quarter 2013 adjusted earnings of 27 cents fell short of the Zacks Consensus Estimate of 40 cents by 32.5%.

Zacks Rank

WPX Energy currently retains a Zacks Rank #3 (Hold). With a market cap of $3.46 billion, the company has 1,200 full time employees.

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