Nexen Inc.’s (NXY) first-quarter 2011 loss from continuing operations were 19 US cents per share, which came nowhere near the Zacks Consensus Estimate of profit 61 US cents as well as the year-earlier profit of 20 US cents.
However, total revenue jumped more than 14% to C$1,644 million (US$1,666.4 million) from the year-earlier level of C$1,438 million (US$1,381.2 million).
Operational Performance
During the quarter, production before royalties averaged 232 thousand barrels of oil equivalent per day (MBOE/d), or 207 MBOE/d net of royalties, comprising 80% liquids and 20% natural gas.
Production before royalties fell approximately 8% year over year and on a net-of-royalty basis, it decreased approximately 6%. Lower production mainly reflects unscheduled maintenance at Buzzard as well as commissioning the fourth platform.
Nexen’s average oil price realization during the quarter was C$98.37 (US$99.71) per barrel, up 26% year over year. Natural gas average price realization during the quarter was C$4.51 (US$4.57) per Mcf, down 16% year over year.
Financials
Nexen spent C$499 million (US$505.8 million) on capital programs during the quarter. As of March 31, 2011, the company had C$1,374 million (US$1,392.7 million) in cash and C$4,724 million (US$4,788.2 million) in long-term debt, with a debt-to-capitalization ratio of 37.3% (up from 36.6% in the previous quarter).
Outlook
Nexen’s diversified portfolio of exploration and production (E&P) assets includes high-impact exploration prospects in the U.S. Gulf of Mexico, offshore West Africa (primarily Nigeria) and the North Sea. This provides the company with a multi-year inventory of development projects and a positive long-term production-growth profile.
The company has been actively investing in its upstream assets in recent years, which has significantly improved its long-term production-growth prospects. In the reported quarter, Nexen approved the Golden Eagle development and highlighted a number of growth prospects, which add up to about 1/3 of current volumes, set to start up in
