Acadiana Business

Stone Energy's 3rd Q. earnings soar

by Leslie Turk

The Lafayette-based energy producer's quarterly net income increased more than $32 million over the comparable quarter last year.

For the third quarter of 2011, Lafayette-based independent producer Stone Energy reported net income of $51.8 million, or $1.06 per share, on oil and gas revenue of $207.7 million. That's $32 million more than the company earned in the comparable quarter last year and came as a surprise to Wall Street, beating analysts' predictions by 28 cents per share.

Stone's 2010 third quarter net income was $19.4 million, or $0.40 per share, on oil and gas revenue of $153.2 million.

The company reported that discretionary cash flow totaled $161.2 million during the third quarter of 2011, as compared to $92.5 million during the third quarter of 2010.

Net daily production of oil and natural gas were up in the third quarter, with prices averaging $103.51 per barrel of oil and $5.17/mcf of natural gas, compared to last year's average prices of $72.52 per barrel and $5.48/mcf.

Announced Wednesday, the company's surprising performance has sent its share price up almost 13 percent from Tuesday to Thursday. The stock closed at $26.24 Thursday. The stock has traded between $14.64 and $35.94 over the past 52 weeks.

In the earnings release, Stone President and CEO Dave Welch had this to say about the company's strategy:

Our strategy is progressing in each of our business units as we have a number of significant projects nearing completion, while others are commencing. We are nearing the objective at our ultra-deep Lighthouse Bayou prospect. Production from our Mary field inWest Virginia is scheduled to come on line in November, which should boost Appalachian volumes to 30-40 Mmcfe per day, including liquids. Our first deep water discovery at Pyrenees is due to commence production for the first quarter at a rate of over 60 Mmcfe per day (gross). Production from the LaPosada/La Cantera Deep Gas discovery is expected by the second quarter of 2012. Finally, three wells in our Deep Waterportfolio are substantially permitted and poised for drilling in 2012. Production growth in the fourth quarter and in 2012, combined with attractive Gulf Coast oil prices and an undrawn credit facility recently reaffirmed at a$400 million borrowing base, should provide liquidity for the drilling of these attractive projects. Additionally, the proceeds from the pending divestiture of our non-operated working interest at Main Pass 296/311 will be targeted for growth opportunities.

Read the full earnings report here.