Below are some highlights from Rex Energy's (NASDAQ:REXX) Q4:
- EBITDAX was $8.1 mm vs Consensus EBITDA of $6.9 mm. This appears to be an "apples to apples" comparison given the size of the impairment and the explorations numbers.
- EPS came in a penny short, and for those of you who have been around here awhile you know I could care less about earnings and small and mid cap E&P stocks. This is a cash flow business and non cash costs that are subtracted to arrive at EPS don't provide a meaningful reflection of corporate earnings power.
- REXX provided no further operational highlights in the quarterly press release to add to the ops update from late January.
- They had already pre-announced the guidance in late January so I'll just stick the updated snapshot table with all of the data below with an updated look at the balance sheet.
- They remain highly hedged for 2011:
- 80% of YE10 oil volumes hedged at $68.54
- > 100% gas volumes with floors at $5.39
Nutshell: This was a good quarter in that 1) they are resuming a production growth track, 2) they didn't come in right at the bottom of the production guidance range which has been the case of recent quarters, 3) they generated strong sequential EBITDAX growth (up 42% from 3Q) (earnings before interest, taxes, depreciation, amortization, impairments, and exploration) which is pretty much the same thing as cash flow, and 4) they saw per unit costs drop as production ramped back up.
\Moreover, they reaffirmed recent guidance (volumes to be up 83% this year) which should be the case considering that the old guidance was barely two weeks old. Nothing to really jump up and down about from a well watching standpoint as again, there is not a whole lot new here on the operational activity side but will be listening on the conference call for more flavor on Niobrara well #3 (which they had previously said looked a whole lot like well number #2 which IP'd at 450 BOEpd) as well as comments about how well #2 is tracking.
Lastly, I'll be listening for how much of their lease hold (45,000 net acres) may look more like infill drilling as their first well did in terms of recovery and if they have noted any regions of greater natural fracturing that will be targeted in 2011.
The conference call is scheduled for February 16, at 11 am EST.
Disclosure: I am long REXX.