Hot Stock of the Day: Jagged Peak Energy Inc. (NYSE: JAG)

On Thursday, Shares of Jagged Peak Energy Inc. (NYSE: JAG) inclined 1.54% to $11.24. The stock grabbed the investor’s attention and traded 230,297 shares as compared to its average daily volume of 1.31M shares. The stock’s institutional ownership stands at 30.30%.

Jagged Peak Energy Inc. (JAG) recently declared financial and operating results for the fourth quarter and full-year ended December 31, 2018.

Fourth Quarter Results

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Stated revenue for the fourth quarter of 2018 was $138.50M, contrast to $104.40M in the fourth quarter of 2017. The increase in revenue in the fourth quarter of 2018 contrast to the same period in 2017 was a result of the 60% increase in production volumes, as fourth quarter 2018 average realized prices, before the effects of derivative settlements, were 17% below the fourth quarter of 2017 on a per Boe basis.

For the fourth quarter of 2018, the Company stated net income of $186.30M, or $0.87per diluted common share. Net income for the fourth quarter of 2017 was $12.80M, or $0.06 per diluted common share. Adjusted net income (a non-GAAP measure) for the fourth quarter of 2018, was $28.20M, or $0.13 per diluted common share, contrast to $20.20M, or $0.09 per diluted common share for the same period in 2017. Adjusted net income (a non-GAAP measure) eliminates certain non-cash and non-recurring items such as certain equity-based compensation, non-cash mark-to-market gains or losses on derivatives and impairment expense, further adjusted for any associated changes in estimated income tax expense. Adjusted EBITDAX (a non-GAAP measure) for the fourth quarter of 2018 was $108.60M, a boost of $30.20M from the fourth quarter of 2017.

Capital expenditures for drilling and completion activities were $155.30M for the three months ended December 31, 2018. Activity during the quarter included drilling and concluding 10 gross (9.4 net) wells, of which, 9 gross (8.9 net) wells were operated by Jagged Peak. In Addition To, a portion of the capital spent during the fourth quarter relates to 19 gross (18.4 net) operated wells that were in various stages of being drilled or accomplished at December 31, 2018. Counting capital expenditures for infrastructure of $5.70M and leasehold acquisition costs of $12.10M, total capital expenditures for the quarter were $173.10M. The Company’s leasehold acquisition costs for the quarter represent additions or extensions of about 1,500 net acres, mainly in Whiskey River.  During 2018, the Company added about 4,100 net acres to its position.  As of December 31, 2018, the Company had about 79,500 net acres, counting Big Tex acres that were impaired, but are still leased by the Company, and about 5,100 net surface acres.


Financial Update

At the end of the fourth quarter, the Company had an undrawn revolving credit facility with elected commitments of $540.0M, and $35.20M of cash on the balance sheet, resulting in total liquidity of $575.20M. The Company’s borrowing base at December 31, 2018 was $900.0M. Net debt to adjusted EBITDAX (a non-GAAP measure) was 1.1x on an annualized basis.

JAG has a market value of $2.37B while its EPS was booked as $0.78 in the last 12 months. The stock has 214.14M shares outstanding. In the profitability analysis, the company has gross profit margin of 86.80% while net profit margin was 28.40%. Analyst recommendation for this stock stands at 2.30.

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