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U.S. independents still riding high on prices Petroleum News survey shows first-quarter profits to rise 6 percent from previous quarter, up 28 percent from year ago Ray Tyson Petroleum News Houston Correspondent
Profits for U.S.-based exploration and production independents, supported by an exceptionally strong oil and gas price environment, continued to rise on average in the 2005 first quarter, according to a Petroleum News survey of Thompson-First Call earnings estimates for 20 sector leading E&P companies.
Results show that net income for the 20 companies is expected to increase an average 6 percent in the 2005 first quarter compared to the previous quarter and increase just over 28 percent vs. the same period last year. However, profits in the 2005 second quarter are expected to dip about 7 percent from the first quarter.
Estimates for individual companies can be higher or lower than the consensus and tend to change as the reporting season approaches. Estimates also generally exclude one-time charges against earnings and other special items.
Companies included in the survey are Pioneer Natural Resources, Kerr-McGee, Anadarko Petroleum, Devon Energy, Unocal, Apache, Chesapeake Energy, XTO Energy, EOG Resources, Noble Energy, Burlington Resources, Newfield Exploration, Forest Oil, Pogo Producing, Spinnaker Exploration, Cabot Oil & Gas, Magnum Hunter, Saint Mary Land & Exploration, Remington Oil & Gas and Houston Exploration. Largest gains expected from Kerr-McGee Among the 11 largest E&P independents surveyed, Oklahoma’s Kerr-McGee is likely to report the largest gains in net income for the 2005 first quarter. The consensus estimate has the company earning $2.15 per share in this year’s first quarter, double $1.07 per share earned in the prior quarter and 45 percent higher than $1.48 per share in the year-ago quarter. However, the company’s expected $1.83 per share for the 2005 second quarter would be well below first quarter earnings.
Apache’s expected profit of about $1.61 per share in the 2005 first quarter would be about 50 percent above the $1.06 per share the company earned a year earlier and roughly 6 percent ahead of the $1.52 per share earned in the previous quarter. The company is expected to make about $1.49 per share in the 2005 second quarter, which also would be below expected first quarter earnings.
Devon is expected to earn about $1.24 per share in the 2005 first quarter, up significantly from the $1 per share earned in last year’s first quarter but down from $1.31 earned in the 2004 fourth quarter. Devon’s anticipated profit of $1.03 per share for the 2005 second quarter also would be down from first quarter expectations.
Anadarko should earn around $1.92 per share in the 2005 first quarter, up from $1.72 per share a year earlier but down from $2.04 per share in the previous quarter. The company’s profit for the 2005 second quarter is expected to be about $1.77 per share, according to consensus estimates. Unocal being taken over by ChevronTexaco Unocal, which is being taken over by ChevronTexaco in a cash and stock deal valued at $18.4 billion, is expected to report 2005 first-quarter earnings of around $1.32 per share, up from $1.17 in the previous quarter and significantly up from 89 cents in the year-ago quarter. The company is expected to earn about $1.14 per share in the 2005 second quarter, down slightly from the first quarter.
Chesapeake’s 2005 first-quarter profit should come in around 50 cents per share. That compares to 44 cents in the 2004 fourth quarter and 44 cents per share in the year-ago quarter. The company is expected to earn about 42 cents per share in the 2005 second quarter.
Pioneer is expected to earn about 49 cents per share in the 2005 first quarter, down from 69 cents per share in the previous quarter and down from 50 cents per share for the same quarter last year. The company is expected to earn about 68 cents per share in the 2005 second quarter, up significantly from the previous quarter.
XTO’s profit for the 2005 first-quarter should be about 56 cents per share, up from 52 cents per share in the previous quarter and up from 38 cents in the year-ago period. For the 2005 second quarter, the company is expected to make about 55 cents per share, slightly below the first quarter.
Burlington’s profit for the 2005 first quarter is expected to be about $1.03 per share, down from $1.17 per share in the previous quarter but up from 89 cents a year earlier. The company is expected to earn about 91 cents per share in the 2005 second quarter, down from the first quarter.
EOG is expected to earn about 79 cents per share in the 2005 first quarter, compared to 81 cents per share in the previous quarter and 53 cents per share in the year-ago period. The company should earn about 68 cents per share in the 2005 second quarter, also down from the first quarter, according to First Call’s mean estimate for the company.
Noble Energy’s expected net income of $1.55 per share for the 2005 first quarter would be down from the company’s $1.63 per share performance in the 2004 fourth quarter but would be up from Noble’s $1.30 per share a year earlier. The company is expected to make about $1.62 per share in the 2005 second quarter, up from expected first-quarter results. Newfield down from previous quarter Among small to middle size exploration and production independents included in the survey, Newfield is expected to earn $1.78 per share in the 2005 first quarter, down from the $1.96 per share the company made in the previous quarter but up from $1.50 per share in last year’s final quarter. The company is expected to earn about $1.63 per share in the 2005 second quarter, which would be down from what the company is expected to make in the first quarter.
Forest’s expected 2005 first-quarter profit of around 80 cents per share would be slightly better than the company’s 78 cents per share performance in the previous quarter and significantly better than its 36 cents per share performance for the same period last year. The company is expected to make about 72 cents per share in the 2005 second quarter, down from the prior quarter.
Pogo is expected to report 2005 first-quarter earnings of about $1.15 per share, a significant increase over 78 cents per share in the previous quarter and slightly better than the $1.12 per share the company earned for the same period last year. Pogo is expected to make about $1.15 per share in the 2005 second quarter, on par with expected first-quarter earnings.
Spinnaker’s expected profit of 40 cents per share in the 2005 first quarter would be slightly better than 39 cents earned in the previous quarter and on par with the 40 cents per share the company made in the year-ago period. The company is expected to earn about 38 cents per share in the 2005 second quarter, slightly below first-quarter expectations.
Cabot’s expected net income of 57 cents per share for the 2005 first quarter also would be better than the 52 cents per share the company made in the previous quarter but substantially better than the 39 cents per share earned for the same period last year. The company should make about 58 cents per share in the 2005 second quarter, which would be slightly above earnings results expected for the first quarter. Magnum Hunter being acquired by Cimarex Magnum Hunter, which is being acquired by Denver’s Cimarex in a $2.1 billion deal, is expected to earn about 42 cents per share in the 2005 first quarter, down from 47 cents per share earned in the previous quarter but up substantially from 28 cents per share a year earlier. The company should make about 40 cents per share in the 2005 second quarter, down slightly from first-quarter expectations.
Saint Mary’s expected first-quarter profit of 53 cents per share in the 2005 first quarter would be more than the 42 cents per share the company earned in the preceding quarter and up from 33 cents per share earned in the year-ago quarter. The company is expected to make about 47 cents per share in the 2005 second quarter, down from what the company is expected to earn in the first quarter.
Remington should earn about 59 cents per share in the 2005 first quarter, compared to 67 cents per share in the previous quarter and 39 cents per share for the same period last year. The company is expected to earn about 57 cents per share in the 2005 second quarter, down slightly from first-quarter expectations.
Houston Exploration’s expected $1.45 per share profit in the 2005 first quarter would be above $1.32 per share earned in the previous quarter and above $1.27 per share earned in last year’s first quarter. The company is expected to make about $1.39 per share in the 2005 second quarter, below first-quarter expectations.
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