NEW YORK (TheStreet) -- Shares of WPX Energy (WPX) are declining 0.38% to $13.09 after its 2015 earnings estimates were lowered to $0.35 from $0.36 at Oppenheimer, with 2016 earnings estimates lowered to $0.82 from $0.96.
However, the firm maintained its "perform" rating as WPX Energy has rapidly driven costs out of its Williston operations. The company's estimated drilling and completion costs in the basin are approaching $8 million per well with six million pound completions, representing a decrease of more than 30% vs. its average in 2014, according to Business Wire.
In the Williston, WPX Energy will transfer a second rig from the Piceance in August and add a third in November, which will start working down its 14-well backlog, Oppenheimer added.
"D&C (drilling and completion) spending will remain in line with cash flows, reflecting both lower well costs and a reallocation of capital from the Piceance," Oppenheimer analysts said.
WPX Energy is an independent natural gas and oil exploration and production company that is engaged in the exploitation and development of unconventional properties.
Separately, TheStreet Ratings team rates WPX ENERGY INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WPX ENERGY INC (WPX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 272.2% when compared to the same quarter one year prior, rising from $18.00 million to $67.00 million.
- The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that WPX's debt-to-equity ratio is low, the quick ratio, which is currently 0.53, displays a potential problem in covering short-term cash needs.
- 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, WPX ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to $194.00 million or 5.82% when compared to the same quarter last year. Despite a decrease in cash flow WPX ENERGY INC is still fairing well by exceeding its industry average cash flow growth rate of -53.29%.
- You can view the full analysis from the report here: WPX Ratings Report