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EOG Resources (EOG) Posts Narrower-than-Expected Q4 Loss

Zacks Equity Research

Upstream energy company EOG Resources Inc. EOG reported fourth-quarter 2016 adjusted loss of 1 cent per share, narrower than both the Zacks Consensus Estimate of a loss of 16 cents and year-ago quarter loss of 27 cents.

Total revenue in the quarter improved almost 34% year over year to $2,402 million. Moreover, the top line handily beat the Zacks Consensus Estimate of $2,067 million.

The strong fourth-quarter results were supported by increased liquid production and higher oil and gas price realizations.

Operational Performance

In the quarter, EOG Resources’ total volume inched up 2.5% year over year to 53.7 million barrels of oil equivalent (MMBoe).

Crude oil and condensate production in the quarter totaled 311.7 thousand barrels per day (MBbl/d), up almost 11% from the prior-year level. Natural gas liquids (NGL) volumes increased 2.3% year over year to 80.9 MBbl/d. However, natural gas volumes decreased to 1,145 million cubic feet per day (MMcf/d) from the year-earlier level of 1,257 MMcf/d.    

Average price realization for crude oil and condensates jumped almost 19% year over year to $47.76 per barrel. Quarterly NGL prices also surged approximately 40% from $13.25 a year ago to $18.51 per barrel. Natural gas was sold at $2.04 per thousand cubic feet (Mcf), up 9% year over year.

Fourth-Quarter Price Performance

During the October–December quarter, EOG Resources outperformed the Zacks categorized Oil & Gas-U.S Exploration & Production industry. In the period, the company gained 5.2% compared with a 0.6% increase for the broader industry.

Liquidity Position

At the end of the fourth quarter, EOG Resources had cash and cash equivalents of $1,599.9 million and long-term debt of $6,979.8 million. This represents a debt-to-capitalization ratio of 33.3%. 

During the quarter, the company generated approximately $1,045.3 million in discretionary cash flow compared with $685.5 million in the year-ago quarter. 

Guidance

During 2017, the company expects crude volume growth of 18%. Moreover, the company projects capital budget in the range of $3.7–$4.1 billion for 2017.

Reserves

As of 2016, net proved reserves were 2,147 MMBoe, up 1.4% year over year.

Zacks Rank & Stocks to Consider

Currently, EOG Resources carries a Zacks Rank #3 (Hold). This implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Some better-ranked players in the energy sector include Ultra Petroleum Corp. UPLMQ, Cheniere Energy Inc. LNG and W&T Offshore Inc. WTI. While Ultra Petroleum sports a Zacks Rank #1 (Strong Buy), both Cheniere Energy and W&T Offshore carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ultra Petroleum is expected to report revenue growth of almost 56% in 2017.

In 2017, Cheniere Energy is likely to report year-over-year growth of almost 287.5% and 76.9% in revenues and earnings, respectively. 

W&T Offshore reported a positive earnings surprise in each of the last four quarters with an average beat of 31.49%.

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EOG Resources, Inc. (EOG): Free Stock Analysis Report
 
W&T Offshore, Inc. (WTI): Free Stock Analysis Report
 
Cheniere Energy, Inc. (LNG): Free Stock Analysis Report
 
Ultra Petroleum Corp. (UPLMQ): Free Stock Analysis Report
 
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