sfy crashes
sfy crashes
Seems there's been logic in the shorts after all, since SFY crashed after earnings, down 25% this AM, even in this environment of higher natgas and supply issues going forward. Woof.
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bearcatbob
Re: sfy crashes
Looks to me that cash flow hit Dan's target. I will be interested to see his analysis.
Bob
Bob
Re: sfy crashes
my main concern is an apparent lack of significant y/y growth. cash flow, reserves and production shoiwed no to modest growth. i too anxiously wait dan's comments. he is here in dallas today, so he probably won't comment until tonight or tomorrow.
Re: sfy crashes
this article shows a lot of insight---
Swift Energy at 5-Year Low on Weak Forecast -- Market Talk 02/27 10:06 AM
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11:06 EST - Swift Energy (SFY:$9.8401,$-1.9999,-16.89%) hits a 5-year low amid a weak 2014 view, in part from delays in selling its central Louisiana assets. As such, the company is targeting capital spending of $300-350M, not the Street's expectation of $ 480M. That means this year's output is seen falling some 2%, says Jefferies, which expected 4% growth. Meanwhile, "Swift is currently looking to JV a portion of its Eagle Ford acreage in order to accelerate development while bringing cash in the door to help fund activity," notes Howard Weil. Operationally, SFY's year-end reserves were more made up of natural gas than prior levels, not a good thing as gas-focused firm have largely been trying to have more of their work encompass higher-profit oil. Shares fall 17% to $9.84. (kevin.kingsbury@wsj.com)
Swift Energy at 5-Year Low on Weak Forecast -- Market Talk 02/27 10:06 AM
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11:06 EST - Swift Energy (SFY:$9.8401,$-1.9999,-16.89%) hits a 5-year low amid a weak 2014 view, in part from delays in selling its central Louisiana assets. As such, the company is targeting capital spending of $300-350M, not the Street's expectation of $ 480M. That means this year's output is seen falling some 2%, says Jefferies, which expected 4% growth. Meanwhile, "Swift is currently looking to JV a portion of its Eagle Ford acreage in order to accelerate development while bringing cash in the door to help fund activity," notes Howard Weil. Operationally, SFY's year-end reserves were more made up of natural gas than prior levels, not a good thing as gas-focused firm have largely been trying to have more of their work encompass higher-profit oil. Shares fall 17% to $9.84. (kevin.kingsbury@wsj.com)
Re: sfy crashes
This caused the Ceiling Test writedown and the selloff.
“In the Artesia Wells area, we have observed a significant difference in the reservoir fluid types across relatively short distances. While we did lower costs and increase initial production rates, the overall long-term liquid performance of the Artesia Wells area is not consistent with previous expectations. This resulted in a significant adjustment downward in our previous estimates of volumes and value of our Artesia Wells acreage in LaSalle County. There are portions of this acreage, however, which continue to have good liquid yields. Improved lifting techniques, along with further improvement in natural gas prices, could improve our future estimates."
“Our year end 2013 reserve volumes increased 14%, but due to the higher natural gas mix, the present value only increased 6%."
Apparently they are not getting a good price for the Louisiana package. That is disappointing.
I need to spend more time on this one. If you take out the Ceiling Test writedown they did beat my forecast. Production, adjusted earnings and cash flow came in above my forecast. Stock is trading at less than 2X CFPS. Hard to justify any E&P trading at that low of a multiple.
I got back late from Dallas and have to prepare for tomorrow's luncheon in Houston. I will look at SFY on Saturday.
“In the Artesia Wells area, we have observed a significant difference in the reservoir fluid types across relatively short distances. While we did lower costs and increase initial production rates, the overall long-term liquid performance of the Artesia Wells area is not consistent with previous expectations. This resulted in a significant adjustment downward in our previous estimates of volumes and value of our Artesia Wells acreage in LaSalle County. There are portions of this acreage, however, which continue to have good liquid yields. Improved lifting techniques, along with further improvement in natural gas prices, could improve our future estimates."
“Our year end 2013 reserve volumes increased 14%, but due to the higher natural gas mix, the present value only increased 6%."
Apparently they are not getting a good price for the Louisiana package. That is disappointing.
I need to spend more time on this one. If you take out the Ceiling Test writedown they did beat my forecast. Production, adjusted earnings and cash flow came in above my forecast. Stock is trading at less than 2X CFPS. Hard to justify any E&P trading at that low of a multiple.
I got back late from Dallas and have to prepare for tomorrow's luncheon in Houston. I will look at SFY on Saturday.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: sfy crashes
Swift Energy’s year-end 2013 estimate of proved reserves as of December 31, 2013 was 219.2 MMBoe, 14% higher than 2012 year-end proved reserves of 192.1 MMBoe. These year-end 2013 proved reserves are 38% crude oil and natural gas liquids and 29% proved developed.
Swift Energy’s year-end 2013 proved reserves were valued at approximately $2.4 billion of present value discounted at 10% per year (PV-10), compared to a PV-10 value of $2.3 billion for the Company’s 2012 year-end proved reserves, a 6% increase. Pricing for 2013 reserves and PV-10 calculations utilized $104.38 per barrel for crude oil and $3.41 per thousand cubic feet (“Mcf”) for natural gas, compared to $103.64 per barrel and $2.71 per Mcf used for reserves valuation at year-end 2012.
Compare to total debt of around $1.5 Billion, so the company should make it.
Also, note that PV10 calculated using a natural gas price of $3.41/mcf. Today's PV10 would be much higher.
Swift Energy’s year-end 2013 proved reserves were valued at approximately $2.4 billion of present value discounted at 10% per year (PV-10), compared to a PV-10 value of $2.3 billion for the Company’s 2012 year-end proved reserves, a 6% increase. Pricing for 2013 reserves and PV-10 calculations utilized $104.38 per barrel for crude oil and $3.41 per thousand cubic feet (“Mcf”) for natural gas, compared to $103.64 per barrel and $2.71 per Mcf used for reserves valuation at year-end 2012.
Compare to total debt of around $1.5 Billion, so the company should make it.
Also, note that PV10 calculated using a natural gas price of $3.41/mcf. Today's PV10 would be much higher.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: sfy crashes
Motley Fool take on the SFY wreck, FWIW:
<<Swift Energy dropped 16% after the small oil and gas company disappointed investors with its fourth-quarter results. Swift announced a loss stemming from a large writedown of its energy assets, but even adjusting for those figures, net income dropped by almost half from the year-ago quarter. For the full year, Swift only managed to increase production by about half a percent, and the company said it wasn't happy with the performance it has gotten from its Artesia Wells area assets. With revenue falling 8% on lower production, Swift needs to find ways to get itself growing again to avoid even further declines in the future.>>
<<Swift Energy dropped 16% after the small oil and gas company disappointed investors with its fourth-quarter results. Swift announced a loss stemming from a large writedown of its energy assets, but even adjusting for those figures, net income dropped by almost half from the year-ago quarter. For the full year, Swift only managed to increase production by about half a percent, and the company said it wasn't happy with the performance it has gotten from its Artesia Wells area assets. With revenue falling 8% on lower production, Swift needs to find ways to get itself growing again to avoid even further declines in the future.>>
Re: sfy crashes (CC transcript)
Here's the transcript of the SFY CC, as you'd expect, more complex than the mkt's reflex:
<<http://seekingalpha.com/article/2056333 ... urce=yahoo
<<http://seekingalpha.com/article/2056333 ... urce=yahoo
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bearcatbob
Re: sfy crashes
"Apparently they are not getting a good price for the Louisiana package. That is disappointing."
In the CC there were no details on this negotiation as it is on going. I wonder how the spike in NG prices in the midst of the negotiation affected the deal making. I suspect that SFY upped the price and that disrupted the negotiation.
SFY has two potential price catalysts pending with the Louisiana package and the Faskin (sp?) JV.
Upon conclusion of either of these deals - their cap ex goes up.
Bob
In the CC there were no details on this negotiation as it is on going. I wonder how the spike in NG prices in the midst of the negotiation affected the deal making. I suspect that SFY upped the price and that disrupted the negotiation.
SFY has two potential price catalysts pending with the Louisiana package and the Faskin (sp?) JV.
Upon conclusion of either of these deals - their cap ex goes up.
Bob