By midafternoon, shares had taken off 11% to $20.55.
The Bermuda-based offshore oiler recorded per-share earnings of 14 cents, a far cry from the 41 cents expected by Thomson Reuters-surveyed analysts. Revenue of $296.82 million came in short of $306.75 million forecast.
Net income tumbled to $10.4 million from $41.3 million in the year-ago quarter. Lower-than-expected profits were due to a higher effective income tax rate, lower realized crude oil sales prices, and hedge ineffectiveness.
Quarterly production averaged 45,100 barrels of oil equivalent (boe) a day, a 1.1% increase on the year-ago quarter. Oil volumes were slightly higher to 30,200 boe a day, up from 29,400 boe a day a year earlier. This marks the third consecutive quarter of increases in oil volume.
"With success at West Delta and Main Pass, we continue to hit our oil production targets," said CEO John Schiller in a statement. "Facilities are being upgraded to allow for a ramp up in drilling activity in the back half of this fiscal year. With six horizontal oil wells set to be drilled at West Delta 73 and 30, we expect a strong finish to our fiscal year in June."
Over the three months to December, capital expenditures topped $189.9 million, with $50.1 million invested in exploration and $139.8 million in development and other costs. Quarterly acquisition expenditures were an additional $12.5 million. For fiscal 2014, a total $705 million, excluding acquisitions, is expected to be reinvested.