PDC Energy (PDCE) Tops Q4 EPS by 14c

PDC Energy (NASDAQ: PDCE) reported Q4 EPS of $0.18, $0.14 better than the analyst estimate of $0.04. Revenue for the quarter came in at $108.1 million, versus $168.63 million reported last year.

Fourth Quarter 2016 Results

Net loss for the fourth quarter of 2016 was $55.6 million, or $0.94 per diluted share, compared to net income of $3.0 million, or $0.07 per diluted share, for the fourth quarter of 2015. The difference between quarterly net loss in 2016 and net income in 2015 was attributable to the combination of an increase in production and revenues in 2016, as described below, and an expense related to the difference in fair value of commodity derivatives of $89.1 million between the two periods. Adjusted net income, a non-U.S. GAAP financial measure defined below, was $10.7 million for the fourth quarter of 2016, compared to $12.0 million for the same 2015 period.

Net cash from operating activities was $125.4 million in the fourth quarter of 2016, compared to $128.1 million in the fourth quarter of 2015. The year-over-year decrease in net cash from operating activities was primarily due to a decrease in net working capital as compared between periods. Adjusted cash flows from operations were $140.5 million in the fourth quarter of 2016, compared to $127.2 million in the same 2015 period.

Fourth quarter 2016 production increased 34% to 69,620 Boe/d, compared to 51,980 Boe/d in the fourth quarter of 2015, and increased 7% compared to 65,265 Boe/d in the third quarter of 2016. The increase in fourth quarter 2016 production was due to ongoing successful horizontal drilling in the Wattenberg Field and the inclusion of 0.2 MMBoe of production in December from the Delaware Basin.

Crude oil, natural gas and NGLs sales were $169.3 million in the fourth quarter of 2016, compared to $103.2 million in the fourth quarter of 2015. The average sales price, excluding net settlements on derivatives, improved to $26.44 per Boe for the fourth quarter of 2016, compared to $21.58 per Boe for the same 2015 period.

Net commodity price risk management activities for the fourth quarter of 2016 resulted in a loss of $63.3 million, which was comprised of $40.3 million of net settlement gains on derivatives and a decrease of $103.7 million in fair value of commodity derivatives, resulting in a net liability of $70.0 million as of December 31, 2016.

Production costs in the quarter were $33.5 million, or $5.23 per Boe, compared to $23.0 million, or $4.82 per Boe, for the fourth quarter of 2015. LOE per Boe was $2.65 for the fourth quarter of 2016, approximately 11% less than 2015 levels of $2.97. The decrease in both production costs and LOE on a per Boe basis in 2016 was due to increased production volumes.

G&A was $33.6 million for the fourth quarter of 2016, an increase from $27.9 million for the fourth quarter of 2015, primarily due to increases in incentive compensation and a 9% increase in personnel over the course of 2016. G&A on a per Boe basis was $5.25 for the fourth quarter of 2016, a decrease of 10% from the 2015 level of $5.84.

DD&A per Boe decreased to $15.41 in the fourth quarter of 2016, compared to $19.91 per Boe in the fourth quarter of 2015 driven by the increase in the Company’s proved reserves. DD&A from all sources in the fourth quarter were $99.5 million and $96.4 million in 2016 and 2015, respectively.

Interest expense for the fourth quarter of 2016 was $19.2 million compared to $12.2 million for the fourth quarter of 2015. The increase in interest expense was primarily related to interest accrued on the Senior Notes and Senior Convertible Notes issued in the third quarter of 2016.

For earnings history and earnings-related data on PDC Energy (PDCE) click here.

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