Stone Energy Corporation (ticker: SGY) reported a net income of $17.1 million, or $0.85 per share for Q4 2017. For the full year of 2017, the company reported a net income of approximately $382.7 million.
Net daily production during the fourth quarter of 2017 averaged approximately 17.6 MBOEPD, compared to net daily production of approximately 19.2 MBOEPD for Q3 2017. Fourth quarter 2017 volumes were affected by five days of downtime from Hurricane Nate and a ten-day planned shut-in of the Pompano platform in November to replace a compressor engine, Stone said. The production mix for the fourth quarter of 2017 was approximately 72% oil, 21% natural gas and 7% NGLs (on an equivalent basis).
Net daily production volumes from the Gulf of Mexico (GOM) for full year 2017 averaged 19.2 MBOEPD, which excludes production from the Appalachia properties that were sold on February 27, 2017. Stone expects production rates to range from 17.5 MBOEPD to 18.0 MBOEPD for the first quarter of 2018, which includes approximately 0.5 MBOEPD of unplanned downtime.
2017 CapEx update
Capital expenditures for the fourth quarter of 2017 were approximately $58 million, which included approximately $23 million related to drilling the Mt. Providence well and $28 million of plugging and abandonment expenditures. In addition, approximately $2.1 million of SG&A expense and $1.3 million of interest expense were capitalized during the fourth quarter of 2017.
For the year-ended December 31, 2017, capital expenditures totaled approximately $154 million, which included approximately $84 million of plugging and abandonment expenditures. Capitalized SG&A and interest expenses for the year ended December 31, 2017 totaled approximately $9.5 million and $6.5 million, respectively.
Reserves
Estimated proved reserves as of December 31, 2017 totaled approximately 32.5 MMBOE. The year-end 2017 estimated proved reserves were 67% oil, 26% natural gas and 7% NGLs (on an equivalent basis).
The year-end 2017 estimated proved reserves included proved developed reserves of approximately 28.3 MMBOE and proved undeveloped reserves of approximately 4.2 MMBOE. In addition to proved reserves, estimated probable reserves totaled approximately 20.8 MMBOE and estimated possible reserves totaled approximately 35.4 MMBOE at December 31, 2017.
All of Stone’s year-end 2017 estimated proved, probable and possible reserves were independently engineered by Netherland, Sewell & Associates, Inc.
2018 CapEx
Stone’s board has authorized a full year 2018 capital expenditure budget of up to $212 million, which excludes acquisitions and capitalized SG&A and interest and does not give effect to the potential Talos combination.
The budget is spread across Stone’s major areas of investment, with approximately 36% allocated to exploration, 27% to development and 37% to plugging and abandonment expenditures.
Talos Energy, Inc. + Stone Energy combination
In November 2017, Stone and Talos Energy announced the combination of the two companies. Based on factors at the time of the November announcement, Talos Energy, Inc. will have an initial equity market capitalization of approximately $1.9 billion and an enterprise value of approximately $2.5 billion, according to the companies’ press release.
- Expected to trade on the NYSE under the new ticker symbol “TALO”
- Each outstanding share of Stone common stock will be exchanged for one share of Talos Energy, Inc. common stock and the current Talos stakeholders will be issued an aggregate of approximately 34.1 million common shares of the new company
- At closing, Talos stakeholders will own 63% of the combined company, with Stone shareholders owning the remaining 37%
- The transaction is expected to close in the second quarter of 2018
