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Independents bask in strong crude oil and gas prices Fourth-quarter profits jump 12% from prior quarter, rocket 74% from 2003 Ray Tyson Petroleum News Houston Correspondent
U.S.-based exploration and production independents continued to benefit from the unprecedented staying power of oil and gas prices during the 2004 fourth quarter, according to a Petroleum News survey of Thompson-First Call earnings estimates for 20 sector-leading companies.
The consensus among industry analysts polled in the survey indicated that earnings for the sector during the final quarter of the year increased an average 12 percent from the previous quarter and about 74 percent compared to the same quarter last year.
Profits are expected to rise another 5 percent on average in the 2005 first quarter vs. the 2004 fourth quarter.
Individual estimates 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.
Major independents included in the survey were Devon Energy, Burlington Resources, Apache, Anadarko Petroleum, Unocal, Kerr-McGee, Chesapeake Energy, Noble Energy, EOG Resources, Pioneer Natural Resources and XTO Energy.
Other independents surveyed were Newfield Exploration, Forest Oil, Pogo Producing, Spinnaker Exploration, Cabot Oil & Gas, Magnum Hunter, Saint Mary Land & Exploration, Remington Oil & Gas and The Houston Exploration Co.
Burlington, generally the first among the larger independents to report quarterly earnings, is expected to realize 2004 first-quarter profit of about $1.19 per share, an increase from 98 cents per share in the 2004 third quarter and a monumental leap from 58 cents per share reported in the 2003 fourth quarter. EOG also is looking at a substantial gain with 2004 net income of about $1.45 per share, up from $1.12 per share in the previous quarter and up from 73 cents per share in the year-ago period. Devon expected to have robust quarter Devon, the largest of the U.S. independents, also is expected to report a robust profit of $1.21 in the 2004 fourth quarter vs. $1.06 per share in the previous quarter and 81 cents for the same period last year.
Apache is expected to report a profit of $1.58 per share for the 2004 fourth quarter. That compares to $1.31 per share in the 2004 third quarter and 87 cents per share in the 2003 fourth quarter.
Noble’s expected profit of $1.45 per share in the 2004 fourth quarter would be more than double the 62 cents per share the company earned for the same period last year. It also would be up from the $1.38 per share reported in the 2004 second quarter.
XTO is expected to post net income of 66 cents per share in the 2004 fourth quarter, up from 58 cents per share in the previous quarter and well above 39 cents per share reported in the year-ago period.
Unocal’s profit is expected to rise to $1.17 per share in the 2004 fourth quarter from $1.09 per share in the 2004 third quarter and from 63 cents per share in the 2003 fourth quarter.
Pioneer, Kerr-McGee and Anadarko should see lower profits for the 2004 fourth quarter compared to the previous quarter but higher margins when compared to a year ago.
For the recent quarter, Anadarko is expected to earn $1.83 per share vs. $1.87 per share for the previous quarter and $1.17 per share for the same period a year earlier.
Pioneer is expected to report about 65 cents per share in earnings for the 2004 fourth quarter compared to 75 cents per share in the previous quarter and 48 cents per share for the year-ago quarter.
Kerr-McGee’s profit for the 2004 fourth quarter should be around $1.04 per share vs. $1.17 per share in the prior quarter and 86 cents per share in the 2004 fourth quarter.
Chesapeake is expected to report a slightly lower profit of 36 cents per share in the 2004 fourth quarter compared to 37 cents per share in the previous quarter and 37 cents per share in the year-ago quarter. Newfield expected to stand out among smaller independents Among the smaller independents, Newfield likely will be a standout with 2004 fourth-quarter earnings of about $1.74 per share, up significantly from $1.25 reported in the 2004 third quarter and 79 cents per share posted in the 2003 fourth quarter.
Houston Exploration also is expected to weigh in with outstanding net income of $1.70 per share for the 2004 fourth quarter. That would compare to $1.51 per share in the previous quarter and 86 cents per share for the year-ago period.
Forest also is expected to report strong 2004 fourth-quarter earnings of 76 cents per share vs. 56 cents per share in the 2004 third quarter and 31 cents per share in the 2003 fourth quarter.
Magnum Hunter, among the fastest growing independents in the United States, is expected to earn 40 cents per share in the 2004 fourth quarter, more than tripling 11 cents per share earned a year earlier. The company earned 30 cents per share in the 2004 third quarter.
Saint Mary should realize a profit in the 2004 fourth quarter of about 83 cents per share, up from 71 cents in the previous quarter and up from 58 cents in the year-ago quarter.
Spinnaker’s expected net income of about 40 cents per share for the 2004 fourth quarter would be more than double the 19 cents per share the company earned in the 2003 fourth quarter and well above the 30 cents per share it earned in the 2004 third quarter.
Remington’s expected 80 cents per share in the 2004 fourth quarter also would be more than double the 32 cents per share in earnings the company made in the year-ago period and also up significantly from the 55 cents per share in the previous quarter.
Cabot’s 2004 fourth-quarter earnings of roughly 78 cents per share would be slightly ahead of the 75 cents per share the company earned in the previous quarter but well above the 60 cents per share it earned in the year-ago quarter.
Meanwhile, the $1.23 per share Pogo is expected to report for the 2004 fourth quarter would be down from $1.35 cents per share in the 2004 third quarter but up from 86 cents per share in the 2003 fourth quarter.
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