SFY
SFY
Swift Energy beats by $0.14, beats on revs; raises production volume guidance (SFY) : Reports Q2 (Jun) earnings of $0.18 per share, $0.14 better than the Capital IQ Consensus Estimate of $0.04; revenues rose 9.3% year/year to $155.7 mln vs the $138.54 mln consensus.
Re: SFY
SFY is a former Sweet 16 company and I own the stock. It crushed my Q2 forecast. I will update the forecast model and post it under the Watch List tab this afternoon. - Dan
Swift Energy Company (SFY) announced second quarter 2014 results today including a 24% increase in production, a 24% increase in adjusted cash flow and a 20% increase in net income, when compared to the second quarter of 2013.
Swift Energy’s production increased 24% to 3.45 million barrels of oil equivalent (“MMBoe”) during the second quarter of 2014, when compared to second quarter 2013 production of 2.78 MMBoe, and a 17% increase over first quarter 2014 production of 2.94 MMBoe. This production growth was driven by the Company’s Eagle Ford properties in South Texas, where second quarter 2014 production from the Eagle Ford formation was approximately 26,600 barrels of oil equivalent per day, an increase of approximately 71% compared to second quarter 2013 levels.
Swift Energy Company (SFY) announced second quarter 2014 results today including a 24% increase in production, a 24% increase in adjusted cash flow and a 20% increase in net income, when compared to the second quarter of 2013.
Swift Energy’s production increased 24% to 3.45 million barrels of oil equivalent (“MMBoe”) during the second quarter of 2014, when compared to second quarter 2013 production of 2.78 MMBoe, and a 17% increase over first quarter 2014 production of 2.94 MMBoe. This production growth was driven by the Company’s Eagle Ford properties in South Texas, where second quarter 2014 production from the Eagle Ford formation was approximately 26,600 barrels of oil equivalent per day, an increase of approximately 71% compared to second quarter 2013 levels.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: SFY
This is a very big deal for SFY. The company had too much debt and this really helps.
On July 15, 2014, the Company announced it had closed a previously announced joint venture to develop its Fasken Eagle Ford acreage. At closing Swift Energy received approximately $147 million, composed of the initial $125 million cash consideration plus its partner’s share of capital costs, net of revenue, since the January 1, 2014 effective date of the transaction, which capital costs included its partner’s carry of a portion of Swift Energy’s field development costs for that same period. After closing, approximately $38 million remains of its partner’s original $50 million drilling carry obligation, which is expected to be fulfilled by calendar year 2016.
The net proceeds received by Swift Energy in this transaction have been used initially to reduce the amount of borrowings under the Company’s credit facility and ultimately a portion of the proceeds will be used to fund accelerated development of its Eagle Ford shale properties.
On July 15, 2014, the Company announced it had closed a previously announced joint venture to develop its Fasken Eagle Ford acreage. At closing Swift Energy received approximately $147 million, composed of the initial $125 million cash consideration plus its partner’s share of capital costs, net of revenue, since the January 1, 2014 effective date of the transaction, which capital costs included its partner’s carry of a portion of Swift Energy’s field development costs for that same period. After closing, approximately $38 million remains of its partner’s original $50 million drilling carry obligation, which is expected to be fulfilled by calendar year 2016.
The net proceeds received by Swift Energy in this transaction have been used initially to reduce the amount of borrowings under the Company’s credit facility and ultimately a portion of the proceeds will be used to fund accelerated development of its Eagle Ford shale properties.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: SFY
I have updated my forecast model for SFY and posted it under the Watch List tab.
My Fair Value Estimate (break-up value) is $24.80/share, compared to First Call's Price Target of $15.00. I think First Call's Price Target will go up a bit due to their very good Q2 report.
Keep in mind that SFY's net production is going to drop significantly (~19%) from Q2 to Q3 because of the JV with Saka Energi in the Eagle Ford. Good news is that they are using the proceeds to pay down debt and they get a promoted carry on the new Eagle Ford wells through 2015.
Based on my forecast, SFY will report losses for Q3 and Q4, but CFPS should remain solid. They should generate about $6.50 Operating Cash Flows per share in 2014. So, the stock is trading for less than 2X CFPS. A multiple that low is for companies on the road to bankruptcy and I sure don't see that coming for SFY. The balance sheet really doesn't look that bad. Today their debt (net of current assets) is around $1.2 Billion and the PV10 of just their proven reserves at the end of 2013 were $2.4 Billion. I've seen a lot worse balance sheets.
SFY is a "gasser", but they have quite a bit of their 2014 production hedged at over $4.00/mcf, so not much near-term risk. If gas prices do increase this winter, it should draw some attention to SFY.
Everything is down today with the dip in oil prices, so don't read anything into the dip in SFY. SFY increased their 2014 and 2015 production guidance, which should get a positive response from analysts when things settle down.
Crude Oil Prices: WTI has been trading in a channel for over two years. The bottom of the channel sits at $96/bbl today. In the last two years WTI has dipped below the bottom of the channel three times and rebounded very quickly. I don't worry much about the oil price unless it closes several days below $96/bbl. I am a bit concerned about the growing differentials for light sweet crude oil. It sure would be nice if the idiots in Washington would approve crude oil exports.
My Fair Value Estimate (break-up value) is $24.80/share, compared to First Call's Price Target of $15.00. I think First Call's Price Target will go up a bit due to their very good Q2 report.
Keep in mind that SFY's net production is going to drop significantly (~19%) from Q2 to Q3 because of the JV with Saka Energi in the Eagle Ford. Good news is that they are using the proceeds to pay down debt and they get a promoted carry on the new Eagle Ford wells through 2015.
Based on my forecast, SFY will report losses for Q3 and Q4, but CFPS should remain solid. They should generate about $6.50 Operating Cash Flows per share in 2014. So, the stock is trading for less than 2X CFPS. A multiple that low is for companies on the road to bankruptcy and I sure don't see that coming for SFY. The balance sheet really doesn't look that bad. Today their debt (net of current assets) is around $1.2 Billion and the PV10 of just their proven reserves at the end of 2013 were $2.4 Billion. I've seen a lot worse balance sheets.
SFY is a "gasser", but they have quite a bit of their 2014 production hedged at over $4.00/mcf, so not much near-term risk. If gas prices do increase this winter, it should draw some attention to SFY.
Everything is down today with the dip in oil prices, so don't read anything into the dip in SFY. SFY increased their 2014 and 2015 production guidance, which should get a positive response from analysts when things settle down.
Crude Oil Prices: WTI has been trading in a channel for over two years. The bottom of the channel sits at $96/bbl today. In the last two years WTI has dipped below the bottom of the channel three times and rebounded very quickly. I don't worry much about the oil price unless it closes several days below $96/bbl. I am a bit concerned about the growing differentials for light sweet crude oil. It sure would be nice if the idiots in Washington would approve crude oil exports.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group