Earnings Review and Free Research Report: Concho’s Revenue Soared 43%; Adjusted EPS Rocketed 100%
Research Desk Line-up: Enerplus Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 21, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Concho Resources Inc. (NYSE: CXO) ("Concho"), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=CXO, following the Company's reporting of its financial results on August 02, 2017, for the second quarter fiscal 2017. The independent oil and gas Company delivered its 8th consecutive quarter in which cash flows from operations exceeded capital expenditures and increased production 27% to 184.7 MBoepd on a y-o-y. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Earnings Reviewed
For the second quarter of 2017, Concho reported revenue of $567 million compared to revenue of $396 million in Q2 2016. The Company's revenue number fell short of analysts' estimates of $640.2 million.
Concho's average realized price for crude oil and natural gas, excluding the effect of commodity derivatives, was $44.75 per Bbl and $2.71 per Mcf, respectively, for Q2 2017 compared to $41.68 per Bbl and $1.88 per Mcf, respectively, for Q2 2016.
Concho's net income was $152 million, or $1.02 per diluted share, for Q2 2017 compared to net loss of $266 million, or $2.04 per diluted share, for Q2 2016. The Company's adjusted net income, which excludes non-cash and unusual items, was $77 million, or $0.52 per diluted share, for the reported quarter compared to adjusted net income of $34 million, or $0.26 per diluted share, for the prior year's same quarter. Concho's earnings exceeded Wall Street's estimates of $0.52 per share.
Operations Summary
Concho's production averaged 184.7 thousand Boe per day (MBoepd) for Q2 2017, reflecting an increase of approximately 27% on a y-o-y basis. Crude oil production for the reported quarter totaled 113.2 thousand barrels per day (MBopd), an increase of approximately 27% from the prior year's corresponding quarter. Average daily natural gas production for Q2 2017 totaled 428.8 million cubic feet (MMcf).
Concho averaged 21 rigs in Q2 2017. The Company is currently running 19 rigs and expects to average 17 rigs in H2 2017. During Q2 2017, Concho commenced drilling or participated in a total of 87 gross wells (60 operated wells) and completed 76 gross wells.
Concho added 12 horizontal wells in the Northern Delaware Basin with at least 30 days of production and an average lateral length of 6,045 feet during Q2 2017. The average peak 30-day and 24-hour rates for these wells were 1,394 Boepd (66% oil) and 1,700 Boepd, respectively. The Company currently has 7 rigs drilling in the Northern Delaware Basin.
Concho added 8 horizontal wells in the Southern Delaware Basin with at least 30 days of production during Q2 2017. The average peak 30-day and 24-hour rates for these wells were 1,740 Boepd (77% oil) and 2,165 Boepd, respectively. This performance and the average lateral length of 8,852 feet represent Company records for the Southern Delaware Basin. The Company currently has 6 rigs drilling in the Southern Delaware Basin.
Concho added 31 horizontal wells in the Midland Basin with at least 30 days of production and an average lateral length of 9,995 feet during Q2 2017. The average peak 30-day and 24-hour rates for these wells were 923 Boepd (87% oil) and 1,078 Boepd, respectively. The Company currently has 5 rigs drilling in the Midland Basin.
In the New Mexico Shelf, Concho added 13 horizontal wells with at least 30 days of production during Q2 2017. The average peak 30-day and 24-hour rates for these wells were 396 Boepd (84% oil) and 553 Boepd, respectively. The average lateral length for these wells was 5,061 feet, which sets a Company record. The Company currently has one rig drilling in the New Mexico Shelf.
Financial Position and Liquidity
At June 30, 2017, Concho had cash of $662 million and long-term debt of $2.7 billion. Concho currently has no outstanding borrowings under its credit facility. Adjusted for the Midland Basin acquisition, the Company had cash of $122 million and long-term debt of $2.7 billion at June 30, 2017.
Outlook
For Q3 2017, Concho expects production to average between 186 MBoepd and 190 MBoepd. For FY17, Concho raised its production growth guidance to a range of 24% to 26% and expects oil production to grow by more than 25%. The Company expects capital expenditures, excluding acquisitions, will approximate the midpoint of the guidance range of $1.6 billion to $1.8 billion. The Company lowered FY17 guidance for depletion, depreciation, and amortization expense to a range of $16 to $18 per Boe compared to the previous guidance of $17 to $19 per Boe.
Stock Performance
On Friday, August 18, 2017, Concho Resources' stock closed the trading session at $108.52, slightly climbing 0.43% from its previous closing price of $108.05. A total volume of 995.14 thousand shares were exchanged during the session. Shares of the Company have a PE ratio of 25.89 and currently have a market cap of $16.07 billion.
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