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EOG Resources, RSP Permian See Sharp Increases In 2017 Investment

EOG Resources and RSP Permian could give production and capital spending guidance for 2017 after peers announced plans in recent weeks to ramp up activity. (© downunderphoto-photolia/stock.adobe.com)

EOG Resources (EOG) and RSP Permian (RSPP) reported quarterly results after the market closes Monday and forecast steep gains in investment and oil production as crude prices recover.

EOG Resources

Estimates: Analysts expect a Q4 loss of 14 cents per share vs. a loss of 27 cents in the year-ago quarter. Revenue is expected to jump 23.1% to $2.21 billion.

Results: Adjusted per-share loss of 1 cent on revenue of $2.4 billion.

Outlook: Full-year capital spending of $3.7 billion-$4.1 billion vs. $2.7 billion in 2016. EOG sees flat to lower well costs in 2017 and 18% crude oil production growth, assuming investment and dividend payments are within cash flow at a $50 average oil price.

Stock: EOG rallied 2% late. Shares closed up 1.7% at 97.91 on the stock market today.

Last week, Apache (APA) announced a capital spending budget for $3.1 billion, up nearly 60% from its 2016. Carrizo Oil & Gas (CRZO) reported mixed results and sees 2017 capital spending of $530 million to $550 million as it expects oilfield service costs to increase this year. Oasis Petroleum (OAS) sees 2017 capex of $605 million, up from $400 million in 2016, excluding acquisitions.

RSP Permian

Estimates: Analysts see earnings plunging 58.3% to 5 cents per share but revenue is expected to climb 27.6% to $123.33 million.

Results: Adjusted EPS of 10 cents on revenue of $122.9 million.

Outlook: Full-year development capital expenditures to soar to $625 million-$700 million vs. $294.2 million in 2016, and production is seen jumping 82%-95% to 53,000-57,000 barrels of oil equivalent per day. RSP Permian agreed last year to pay $2.4 billion for drilling rights to 41,000 net acres in the Delaware portion of the Permian. Annual production growth in 2018 and 2019 is seen topping 30%.

Stock: Shares finished 2.7% higher at 40.97.

The Permian was the epicenter of low-cost production during the downturn in crude prices and has seen a surge in activity since price began recovering last year.

Total oil rigs in the prolific formation climbed by three to 306 last week, a 13th straight week of gains, according to Baker Hughes data out Friday.

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