Featured Company News - Stone Energy Reported Drilling Operations at Rampart Deep Spud Prospect; Announced Workforce Reductions
Research Desk Line-up: Energy XXI Gulf Coast Post Earnings Coverage
LONDON, UK / ACCESSWIRE / June 13, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Stone Energy Corp. (NYSE: SGY). The Company announced on June 09, 2017, that it has commenced on June 03, 2017, the drilling operations on its Rampart Deep Prospect in Mississippi Canyon Block 116. The Stone Energy generated prospect will be drilled and operated by Deep Gulf Energy III, LLC, and is expected to be linked back to Stone Energy's 100% owned Pompano platform, if successful. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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The Announcement
The prospect is located nine miles from the Pompano platform and is estimated to take two months to drill, after a sell down of a portion of its position, where Stone Energy holds a 40% work interest in the well and received leasehold and other reimbursable costs. The prospect targets the Miocene interval, where Deep Gulf Energy III, LLC holds 30% working interest and entities managed by Ridgewood Energy Corporation, including Riverstone Holdings, LLC and its portfolio firm, ILX Holdings III, LLC, with 30% working interest.
The Company recently implemented the workforce reductions in an attempt to adjust the employee base according to the current business needs. The Company expects this action to result in an about 25% decrease in salaries, general and administrative cash costs for the second half of 2017, transforming into an expected quarterly cash SG&A outlay, prior to capitalization and about $11 million to $12 million per quarter, excluding the non-recurring and non-cash items. The Company expects to reduce its SG&A by about 50% from 2016, on a Y-O-Y basis.
The Company views the Rampart Deep Well as an important step in Stone Energy's forward strategy. A successful test on the Prospect could clear the path for a multi-well development program, with a tie back to its Pompano platform, further leveraging this facility. Partnering with Deep Gulf Energy and Ridgewood, this well reflects the Company's renewed focus on efficient use of capital, and the reduction in SG&A is the continued commitment to manage the costs and better position the Company to grow in the current commodity price movement.
Company Growth Prospects
The Company emerged from bankruptcy on February 28, 2017, under which the Company eliminated about $1.2 million of principal amount of outstanding debt, resulting in remaining debt outstanding at about $236.3 million, consisting of $225 million of 7.50% senior secondary lien notes due 2022, and about $11.3 million outstanding under a building loan. Stone and its wholly-owned subsidiaries filed their voluntary chapter 11 petitions and the Plan in the US Bankruptcy Court for the Southern District of Texas in Houston on December 14, 2016.
Under its attempt to settle the debt, the Company announced the close of the sale of its Appalachia properties on February 23, 2017. The Company completed its previously announced disposition of about 86,000 net assets in the Appalachian regions of Pennsylvania and West Virginia to EQT Corporation, through the latter's wholly-owned subsidiary EQT Production Company for a purchase price of $527 million in cash, subject to customary purchase price adjustments and an upward adjustment to the purchase price of up to $16 million in an amount equal to certain downward adjustments.
Last Close Stock Review
On Monday, June 12, 2017, the stock closed the trading session at $24.53, climbing 1.95% from its previous closing price of $24.06. A total volume of 303.23 thousand shares have exchanged hands, which was higher than the 3-month average volume of 158.83 thousand shares. Stone Energy's stock price soared 11.70% in the last one month, 30.20% in the past three months, and 28.55% in the previous twelve months. The stock currently has a market cap of $480.30 million.
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