Shares in independent oil and gas explorer Stone Energy Corporation (NYSE:SGY) gushed higher Tuesday after the company reported a smaller quarterly loss and production volumes beat its own guidance.
The stock closed at $5.65, up 40.55%, on volume of 3.99 million shares, more than four times its average volume.
Technically, however, this is not enough and there appears to be no immediate signal that the stock will emerge from its habitual residence in all-time-low territory and reverse its downtrend.
Stone Energy Corporation (NYSE:SGY) Q3: Case of the one swallow summer?
Shares surged higher despite the company’s miss on both EPS and revenue during its third quarter.
Stone reported EPS of $-7.40, which missed by $0.31, and revenue of $93.4 million, which missed by $3.2 million and was down 27.3% year on year.
However, the company incurred a net loss of only $89.6 million compared to a net loss of $292.0 million in the year ago quarter.
Net daily production during the third quarter of 2016 averaged 39.1 thousand barrels of oil equivalent (MBoe) per day. This exceeded the previous guidance in the range of 35 Mboe–37 Mboe per day.
For the fourth quarter, Stone expects production in the range of 41 – 43 MBoe per day, and for the full year, of 35 – 37 MBoe per day.
Stone Energy Corporation (NYSE:SGY) Q3: Restructuring negotiations continue for pre-packaged bankruptcy
The company is continuing its work on securing a suitable restructuring agreement that would enable a pre-packaged bankruptcy filing on or before December 9, 2016.
If the aforesaid plan of reorganization is successfully implemented, it will eliminate approximately $850 million in principal of outstanding debt and reduce its annual interest payment burden by approximately $46 million.
The company clarified, however, that although it intends to pursue the restructuring in accordance with the terms set forth in the Restructuring Support Agreement, as well as its Amendment, there can be no assurance that it will be successful in completing a restructuring or any other similar transaction on the terms set forth in the RSA and the RSA Amendment, on different terms or at all.
It also warned that an interest payment of about $29.2 million would be due by December 15, 2016 (inclusive of a grace period of 30 days). If it fails to make the said payment, it would constitute an event of default.