Stone Energy Corp. (SGY) has maintained its 2010 net daily production guidance at 205-225 million cubic feet of gas equivalent (MMcfe) and capex at $400 million.
In the first quarter, the company’s earnings were 55 cents per share, below the Zacks Consensus Estimate of 58 cents. Despite increased volumes, the results came in below our expectations mainly due to lower gas price realizations. Revenues for the reported quarter increased more than 15% year-over-year to $165 million.
Production during the quarter averaged 212.6 million cubic feet of gas equivalent per day (MMcfe/d), up approximately 10% from the year-earlier level. For the second quarter, the company expects net daily production of 210−225 Mmcfe.
Prices realized during the quarter averaged $70.72 per barrel of oil (up more than 29% year-over-year) and $5.97 per Mcf of natural gas (down nearly 15%). Overall realization, on a per Mcfe basis, was up slightly from the year-earlier level to $8.56.
On the costs front, unit lease operating expenses (LOE) were down 39% significantly to $2.02 per Mcfe. DD&A was down nearly 9% year-over-year to $3.09 per Mcfe and SG&A expenses were down 18% year-over-year to 55 cents per Mcfe.
At the end of the quarter, the company had approximately $56.7 million in cash and $575 million in long-term debt. Discretionary cash flow was $115.6 million during the quarter, up approximately 69% year over year.
The company intends to deploy 55% of this year’s capital budget to the Gulf of Mexico (GoM) regions. GoM remained the company’s principal area for growth prospects. Stone Energy is advancing a multi-year inventory of drilling prospects to help maintain the relatively stable production for the next few years. Management has also confirmed that the recent oil spill in the GoM due to the rig explosion has not disrupted the company’s operations to date.
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