The second quarter has been good to oil and gas companies. To follow some of the names that have outperformed the most recent quarter, I have compiled a list. This list focuses on names that have surpassed estimates.
Crimson Exploration (CXPO) beat earnings estimates by 60%. It reported a loss of 2 cents versus the street's expectation of a loss of 5 cents. It increased average quarterly production 62% year over year. Its average liquids production increased 50% over the prior year quarter. Crimson had a 63% increase in EBITDAX over the second quarter of 2010. It increased cap ex for the purpose of accelerating Eagle Ford oil production. Crimson has a forward P/E of 272. Analysts expect growth of 105.6%.
Warren Resources (WRES) beat earnings by 66.7%. Its EPS was $0.10/share compared to the street's estimate of $0.06/share. Oil and gas revenues increased 28% compared to the second quarter of 2010. Cash flow from operations grew 27%. Its capital budget was increased by $11 million. Warren's average realize price per barrel of oil in the second quarter of 2011 was $97.36 versus the second quarter of 2010's $69.71. Most importantly was Warren's favorable resolution of pending regulatory matters at the Wilmington Townlot Unit. Warren could be turning a corner here, and is not a bad bet in the intermediate to long term.
Callon Petroleum (CPE) beat earnings by 121.43% in the second quarter. It reported earnings of 31 cents/share versus the street's estimate of 14 cents/share. It increased crude oil revenues by 83% over the second quarter of 2010. Callon completed a public offering of 10.1 million shares to partially fund accelerated Permian drilling program. Callon has beat analyst estimates for the third time in four quarters by triple digits. It currently trades for 7 times next years earnings.
EOG Resources (EOG) had a very good quarter, beating earnings estimates by 40.51%. EOG reported earnings of $1.11 versus the street's estimate of $.79/share. Revenue increased 89.3% year over year. Crude oil and condensate production increased 49.9% from the second quarter of 2010. Average price realization of crude oil and condensate increased 37.3% year over year. One thing to remember about EOG is its ability to move rigs from natural gas to liquids rich locations. It is my opinion this is just the beginning of a longer term story for the company.
Kodiak Oil and Gas (KOG) beat earnings by 33.3%. It reported earnings of 4 cents/share versus the street's estimate of 3 cents/share. Although Kodiak only beat by a penny, it had a fantastic quarter. It had a 261% increase in sales of oil and gas. It also registered 377% growth in adjusted EBITDA. Most importantly was its two new Bakken wells. These wells were much better than expected. I believe this stock has value at or below six dollars per share.
REX Energy (REXX) beat estimates by 50% in the second quarter. It had earnings of 9 cents/share versus the street's estimate of 6 cents/share. Its revenue increased by 84% and average production increased 87%. REXX also announced it had acquired lease rights to 11000 acres in the Utica shale. I would watch this name to see how it continues to increase production.
SM Energy (SM) beat earnings estimates by 65.45%. It posted earnings of 91 cents/share versus the street's estimate of 55 cents/share. Total revenue increased by 78.5% in the prior year-quarter. The second quarter production was up 58% year over year. SM Energy also raised full year 2011 guidance. This was a great quarter, which significantly outperformed estimates. SM is a very good investment.
Miller Energy Resources (MILL) beat earnings estimates by 142.86% in the second quarter. Miller earned 3 cents/share versus the street's estimate of a loss of 7 cents/share. This was a very good quarter for Miller. Although the results were good, Miller is currently the focus of several class action lawsuits. I would stay away from MILL.
Clayton Williams (CWEI) beat earnings estimates by 158.09%. It reported earnings of $3.51/share versus the street's estimate of $1.36/share. Much of this was from a gain on derivatives. The average realized oil price was $100.07. This was an increase from $74.27 in the second quarter of 2010. Oil production increased 10%. Clayton was downgraded recently by Global Hunter. I would be careful with this company. I have owned this stock in the past, and think it may pull back more in the short term.
Cabot Oil and Gas (COG) beat earnings by 46.43%. It reported 41 cents/share versus the street's estimate of 28 cents/share. Year over year, Cabot's sales improved by 20.2%. Production grew by 47.5%. Cabot increased its production growth outlook between 40% and 46% for the full year. Cabot is very interesting here. It has a well diversified asset base in some of the best plays in the country. I like this company as an investment.
QEP Resources (QEP) beat second quarter earnings by 27.27%. It announced earnings of 42 cents/share versus the street's estimate of 33 cents/share. Its production was up 20% from last year. Year over year average realized crude prices were up 39%. NGLs were up 30% from the second quarter of 2010. The combination of production increases and higher realized prices helped to create a very good quarter.
Range Resources (RRC) beat earnings by 42.11%. It posted results of 27 cents/share versus the street's estimate of 19 cents/share. Total revenue increased 60.4% year over year. This company is a story on NGLs. This increased 49% year over year. Range is currently focusing on its Marcellus play, which seems to have benefited the company in the second quarter. Range increased its guidance on 2011 production growth from 10% to 25%-30%. Range looks to be a good investment.
There are some very good companies included in this list. All are increasing production, which benefited from strong oil and NGL pricing. Liquids continue to be the story. Companies working the Marcellus continue to outperform estimates and should continue to do so. The Eagle Ford continues to provide very good production growth. The Bakken should do much better in the third quarter. Much of the flooding in the Williston Basin has improved, which is providing for drill program expansion.
This is a list of companies that outperformed in the second quarter of 2011. This is just a list and not a buy recommendation. I recommend studying a company thoroughly before making an investment.