The Sundance Energy Australia Limited (ASX: SEA) share price jumped 2.7% in early trade and will be on watch today after the company reported solid Q4 2018 and full-year earnings results this morning.
What were the results highlights?
Sundance announced net income attributable to the owners of the company was US$64.7 million (A$91.3 million) for the fourth quarter and a loss of US$28.1 million for the full year.
The company's year-end 2018 net debt of US$313.4 million represents a 1.6x debt-to-EBITDAX (earnings before interest, tax, depreciation, amortisation and other costs) leverage multiple on a last quarter annualised basis.
Positively, total revenue for the fourth quarter increased 105.7% on the prior corresponding period (pcp) to US$58.3 million (A$82.3 million) despite the net full-year loss.
Average fourth quarter realised prices excluding hedging were US$60.30 per barrel of oil, US$3.03 per million British Thermal Units (MMBtu) of gas, and US$26.20 per barrel of natural gas liquids (NGL).
Cash operating costs for the quarter improved 7.2% on pcp and 15.7% on a quarter-on-quarter basis in a big plus for the group's future cash earnings.
What FY19 guidance did Sundance provide?
Sundance plans to use incremental cash flow from improving prices to pay down debt, return capital or utilise in future investment opportunities.
The company intends to bring 25 wells online in FY19 at a capital cost of US$135 million – US$155 million and expects to generate US$165 million – US$180 million in adjusted EBITDAX for the full-year.
How does Sundance compare to its peers?
Sundance has seen its share price plummet 55% in the last 6 months and has significantly underperformed some of its peers including Santos Ltd (ASX: STO) and the rocketing Beach Energy Ltd (ASX: BPT) share price.
I'm not sure Sundance is going to rebound any time soon, particularly with global oil prices seeing significant volatility on OPEC cuts and geopolitical tensions that don't look like subsiding anytime soon.
For those who are similarly bearish on Sundance, I'd suggest checking out this top-rated stock in a booming industry could give you the edge as a growth investor.
