NEW YORK (TheStreet) --Shares of Emerald Oil (EOX) were falling 22.3% to 99 cents Friday, hitting a 52-week low of 90 cents, after the oil company lowered its production guidance for the fourth quarter and 2015, and its 2015 capital expenditure guidance amidst falling oil prices.
The oil company said it now expects to produce an average of 3,300 barrels of oil equivalent for the fourth quarter, down from its previous production guidance of 4,300 BOE a day. Emerald lowered its 2015 production guidance to between 4,200 BOE and 4,500 BOE a day, down from previous estimates of 5,425 BOE to 5,800 BOE a day.
Emerald lowered its drilling and completion budget to between $62 million and $81 million from its previous range of $210 million to $240 million.
Lower oil prices also helped bring down shares of Emerald. WTI crude oil for January delivery was falling 3.5% to $57.85 a barrel Friday afternoon, while Brent crude oil for January delivery was falling 2.6% to $62 a barrel.
TheStreet Ratings team rates EMERALD OIL INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate EMERALD OIL INC (EOX) 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. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- EOX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 78.20%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EMERALD OIL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that EOX's debt-to-equity ratio is low, the quick ratio, which is currently 0.58, displays a potential problem in covering short-term cash needs.
- The gross profit margin for EMERALD OIL INC is currently very high, coming in at 74.68%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 34.22% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 51.22% to $11.07 million when compared to the same quarter last year. In addition, EMERALD OIL INC has also vastly surpassed the industry average cash flow growth rate of -1.72%.
- You can view the full analysis from the report here: EOX Ratings Report