Newfield Exploration Co. (NFX), Oasis Petroleum Inc. (OAS): Three Energy Firms to Watch This Earnings Season

Page 1 of 2

Oil and gas Exploration and Production (E&P) companies Newfield Exploration Co. (NYSE:NFX) and Hess Corporation are among those American energy firms which, amid pressure from shareholders, have been divesting from less lucrative international oil and gas ventures and investing in more profitable areas closer to their home market. I have already discussed about Hess Corporation’s strategic change and its implications in my previous article.

Here, I will discuss Newfield Exploration Co. (NYSE:NFX) and two other E&P plays – the rapidly growing Oasis Petroleum Inc. (NYSE:OAS) and Wall Street favorite Anadarko Petroleum Corporation (NYSE:APC) – which can beat the market’s expectations in their upcoming earnings release.

Oasis Petroleum Inc. (NYSE:OAS)

A recent report by Reuters revealed that Newfield Exploration Co. (NYSE:NFX) and Hess are selling their $3 billion stake in Asian oil and gas fields through two separate auctions. Hess Corporation is selling its assets in Indonesia and Thailand that have an estimated value of around $2 billion. Newfield Exploration Co. (NYSE:NFX) is selling Chinese and Malaysian fields worth $1 billion.

Newfield Exploration Co. (NYSE:NFX)’s domestic liquids production has been its strong point and this is the area where investors need to focus. Newfield Exploration Co. (NYSE:NFX)’s core business is liquids production which accounted for 56% of its net production of 11.7 million barrel of oil equivalent (boe) in the previous quarter. Nearly 85% of the total liquids production is crude oil and condensates.

In domestic operations, its liquid production rose 9% sequentially and 30% year-over-year, when adjusted for asset sales. In coming years Newfield will report significant growth in domestic liquids but will scale down its international operation, so its total output could fall. It will spend around $1.8 billion in capital expenditure this year while its domestic liquids volume will grow by 39%.

Newfield’s second quarter results are due on July 24 and it is expecting a 12% sequential growth in the domestic liquid production. In the previous quarter, Newfield posted better than expected operational performance which helped restore investor confidence. The company was able to beat both revenue and earnings estimates. Based on its production plans, such as better well development and additional drilling in oil-rich fields like Uinta, Williston Basin and Cana Woodford, along with capex estimates, I believe the company could very well beat the analysts’ estimates once again in their earnings release.

Its shares have remained under pressure as it reported consecutive earnings misses in the last three quarters of the previous year. However, its most recent earnings beat caused its shares to rally as its stock rose by 9.2% in the final week of April. If it manages to deliver another earnings beat, then this could happen again as there is still considerable room for improvement.

In its previous quarter, Oasis Petroleum Inc. (NYSE:OAS) reported adjusted earnings of $0.56 per share showing a massive increase of 80.65% from last year while revenue rose by an impressive 79.2% year-over-year to $248.3 million. Needless to say, the company managed to beat earnings estimate by $0.05 per share and revenue estimates by $26.3 million. The revenue beat is a very healthy sign for investors which points towards a company with high growth potential. Moreover, in the last five quarters, Oasis Petroleum Inc. (NYSE:OAS) has consistently beaten the analysts’ revenue estimates.

Oasis Petroleum Inc. (NYSE:OAS) will invest nearly all of its $1.02 billion capital expenditure in E&P activities. Its production is also going strong as its output now stands at 30,153 boe per day showing a 71% increase from the same quarter last year. The company has set a target of between 31,000 and 34,000 boe per day. It is also a key player in the oil dominated Williston Basin and holds 335,000 net acres in the region. With the rapid increase in production, improvements in realized prices and costs, the company appears on track to deliver another earnings beat on August 5 and therefore I am bullish on Oasis Petroleum Inc. (NYSE:OAS).

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!