NEW YORK (TheStreet) -- Bonanza Creek Energy (BCEI) - Get Bonanza Creek Energy Inc Report stock is advancing by 13.9% to $7.62 on heavy trading volume on Monday afternoon, after the U.S. Energy Information Administration revised downward its production estimates for the first half of the year sending oil prices up.
WTI crude is gaining 7.96% to $48.82 per barrel, while Brent crude is up increasing 7.45% to $53.78 per barrel, according to the CNBC.com index.
U.S. oil companies produced an average of 9.4 million barrels a day of crude oil for the first half of the year, down from the previous estimate of 9.5 million barrels, the EIA report shows.
June crude oil production averaged 9.3 million barrels per day, a 7.1% increase year-over-year, but a 1.1% decrease from May's production.
Crude oil production peaked in April with energy companies pumping an average of 9.6 million barrels per day.
Separately, TheStreet Ratings team rates BONANZA CREEK ENERGY INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BONANZA CREEK ENERGY INC (BCEI) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BONANZA CREEK ENERGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, BONANZA CREEK ENERGY INC reported lower earnings of $0.40 versus $1.72 in the prior year. For the next year, the market is expecting a contraction of 230.0% in earnings (-$0.52 versus $0.40).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 3648.7% when compared to the same quarter one year ago, falling from $1.16 million to -$41.17 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BONANZA CREEK ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $16.07 million or 79.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 89.80%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2866.66% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full analysis from the report here: BCEI Ratings Report