MLV analyst Chad Mabry is weighing in on Energy XXI (NASDAQ:EXXI), following the company’s fiscal second-quarter results, posting CFPS of $1.61, beating MLV’s estimate of $1.45 and consensus of $1.46. The analyst rates the stock a Hold, without suggesting a price target.
Mabry commented: “The outlook is improving. We were focusing on the company’s ability to demonstrate reductions on its cash operating costs and are modestly encouraged by those results. G&A also appears to be trending lower following reductions in headcount. Meanwhile, management is taking several measures to enhance liquidity, including (1) monetizing hedges, (2) reducing its common dividend, and (3) pursuing asset rationalizations. We’re leaving our Hold rating unchanged for now, but we could reassess as the company continues to execute on this agenda.”
The analyst added, “Our CFPS estimates are drifting higher after the company locked-in >$100 million of realized hedge gains over the next 4 quarters. As a result, our 2015 CFPS estimate improves to $4.81 (from $4.48; consensus is $5.01) and our 2016 CFPS estimate improves to $3.21 (from $3.11; consensus is $4.79)”
Energy XXI (Bermuda) Limited is engaged in the acquisition, exploration, development, production, and operation of oil and natural gas properties onshore in Louisiana and Texas, and on the Gulf of Mexico.