WPX Energy (WPX) Stock Falls on Lower Oil Prices

NEW YORK (TheStreet) -- Shares of WPX Energy (WPX) were falling 43.7% to $8.38 Monday as oil prices continued to fall.

WTI crude oil for September delivery was down 2.06% to $46.15 a barrel Monday morning, and Brent crude oil for September delivery was down 3.43% to $50.42 a barrel.

Oil prices were falling due to a higher U.S. rig count and signs that Middle East producers are pumping crude at record levels, according to Reuters.

On Friday Baker Hughes (BHI) announced the five oil rigs were put online in the U.S. in the week ending July 31. The increase brought the total U.S. rig count to 664 rigs.

A recent survey by Reuters showed that OPEC member countries pumped more than 32 million barrels of crude a day in July, a 140,000 barrel a day increase from June.

WPX Energy is a Tulsa, OK-based oil and natural gas exploration and production company. The company has resources plays in the Williston Basin in North Dakota, the San Juan Basin in New Mexico, and the Piceance Basin in Colorado.

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 -48.80%.
  • You can view the full analysis from the report here: WPX Ratings Report

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