Shale Oil Producer Stocks Drop: Marathon Petroleum Beats Estimates

Marathon Petroleum (MPC) beat earnings predictions Tuesday after shale producers Devon Energy (DVN) and Diamondback Energy (FANG) did the same Monday evening. All three companies booked losses during market trading Monday as crude oil tumbled. DVN and FANG stock edged lower overnight. MPC angled up before market trading Tuesday.

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MPC, DVN and FANG are the first of several U.S. shale oil producers that will be reporting quarterly results this week, coming on the heels of energy giants Exxon Mobil (XOM), Chevron (CVX) and Shell (SHEL) all posting record profits. Shale oil producer stocks fell broadly on Monday as crude oil prices also dropped sharply.

Marathon Petroleum Earnings

Estimates: Analysts forecast Marathon Petroleum earnings per share 0f $8.92 vs. 67 cents in Q2 2021, with sales up 35% to $40.3 billion.

Earnings: MPC reported earnings per share ballooning 1483% to $10.61. Sales increased 82% to $54.2 billion.

“Our team delivered on supplying products to meet strong market demand,” CEO Michael Hennigan said in a statement.

The company’s capital expenditures in the second quarter were $577 million, up 23% year over year. So far in 2022, MPC’s capital spending has spiked 31% to $1.1 billion.

MPC stock rose 4% early Tuesday, signaling a move above the 50-day line. Marathon Petroleum shares fell 1.4% to 90.40 on Monday. The stock rebounded from its 200-day average in mid-July. MPC stock is in the midst of consolidation with a buy point of 114.45.

The Ohio-based MPC primarily focuses on downstream production and operates the largest refining system in the U.S. The company also is the majority owner of MPLX (MPLX), which is a midstream company involved in natural gas and crude oil production.

Marathon Petroleum ranks eighth in the Oil & Gas-Refining, Marketing and Transportation industry group. MPC has a 93 Composite Rating. Its Relative Strength Rating is 96 and EPS Rating is 77.

Shale Oil Producer Stocks: Devon Energy Earnings

Estimates: FactSet analysts projected earnings for Devon Energy to skyrocket 285% year over year to $2.31 per share and sales to surge 72% to $4.1 billion for the second quarter.

Results: Devon Energy earnings surged 331% to $2.59 per share, a 331% increase year over year. Revenue grew 133% to $5.6 billion.

Based on its second quarter performance, DVN increased its full-year production guidance by 3% to a range of 600,000- 610,000 oil-equivalent barrels per day. Devon Energy also adjusted its upstream capital guidance to between $2.2-$2.4 billion, up from $2.1 billion.

“This success was showcased by production from our Delaware-focused program that exceeded guidance expectations, our streamlined cost structure captured the full benefit of higher commodity prices and we returned record-setting amounts of cash to shareholders,” CEO Rick Muncrief said in a news release.

Production for the second quarter averaged 616,000 oil-equivalent barrels per day, an increase of 7% from Q1. Upstream capital spending was 5% below the company’s expectations, totaling $513 million.

Devon Energy expects capital spending in Q3 to total between $680-$755 million.

Shares fell a fraction before the open in Tuesday’s  stock market trading. DVN stock fell 2% to 61.59 on Monday. Devon Energy has started to work its way higher after finding support at the 200-day line. DVN stock is still below its 50-day line, according to MarketSmith.

The Oklahoma City-based Devon Energy is a leading onshore U.S. oil and gas producer. It operates in multiple basins across the country, including the resource-rich Delaware Basin in West Texas and the Barnett Shale, one of the largest onshore natural gas fields in the U.S.

The company ranks third in the Oil & Gas-U.S. Exploration and Production industry group. DVN has a Composite Rating of 99. It has a 98 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement with a 1 to 99 score. The rating shows how a stock’s performance over the last 52 weeks holds up against all the other stocks in IBD’s database. The stock has an EPS Rating of 80.

Diamondback Energy Earnings

Estimates: Wall Street projected Diamondback Energy earnings per share of $6.68, a 179% increase over the year-ago quarter, and a 48% rise in sales to $2.5 billion.

Earnings: Diamonback Earnings per share increased 194% to $7.07. Revenue climbed 59% to $2.7 billion.

Capital spending on operating and non-operating drilling in Q2 was $468 million. So far in 2022, Diamondback Energy capital expenditures have come to $905 million. The company is projecting another $470-$510 million in spending in the third quarter.

“We continue to focus on operational excellence and cost control in this inflationary operating environment, working to mitigate and offset the persistent inflationary pressures we are seeing across our business. Diamondback has a strong track record of cost control, and we expect to continue to improve on this track record in the coming quarters,” CEO…