Will EV Energy Partners Snap its Losing Streak? (EVEP)

Yesterday, following a downgrade by “The Street Ratings”, the share price of oil and gas company EV Energy Partners (NASDAQ: EVEP) opened below Tuesday’s close and continued to trade in the negative zone for the rest of the day. The past three trading sessions saw the share price of EV Energy lose more than $7.00 from the opening price of $65.07 on November 8, the day on which the company reported fiscal 2012 third-quarter revenue well below analysts’ estimates.

The Texas-based EV Energy Partners is engaged in the exploration of oil and natural gas. The company has net proven reserves of approximately 1144.4 billion cubic feet equivalent, including 15.1 million barrels of oil, 40.9 million barrels of natural gas liquids, and 808.6 billion cubic feet of natural gas.

The share price of EV Energy is currently around the mid-way point between the yearly high and low. Back in December 2011, the share price of EV Energy rose from around $66.00 to $72.70 after the company publicized the completion of the Barnett shale acquisition. The announcement of an upsized public offering priced at $67.95 per unit took the share price to the 52-week high of $73.75. The fiscal 2011 fourth-quarter results that missed estimates initiated unwinding of the long positions in March 2012. A downgrade by “The Street Ratings” from “buy” to “hold” aided a deep correction resulting in a share price of around $60.00 in mid-April. As crude oil fell, the share price declined further to $48.31 on June 4, in spite of reporting fiscal 2012 first-quarter results that beat estimates. After touching a 52-week low of $43.56 on June 26, the share price of EV Energy recovered along the path of the rise in crude price. The share price staggered in the range of $45.00 to $50.00 until mid-August. The information regarding production from the Utica oil well lifted the share price to $65.00 in the first week of September 2012. However, a downgrade by Global Hunter from “buy” to “neutral” took the share price back to $59.76 in the last week of September.

On October 25, EV Energy declared a fiscal 2012 third-quarter cash dividend of $0.766 per unit. The dividend was paid on November 14, 2012, to unit holders of record at the close of business on November 7, 2012. On November 8, the company reported the fiscal 2012 third-quarter results.

Total revenues for the fiscal 2012 third quarter increased to $68.70 million from $64.39 million in the similar period last year. The revenue estimate of analysts was $92.3 million for the third quarter of fiscal 2012.

The GAAP net loss per limited partner for the reported quarter was $49.02 million, or $1.15 per unit, compared to a net profit of $83.10 million, or $2.40 per unit, in the comparable quarter of fiscal 2011.

From the day the results were reported, EV Energy continues to see erosion in value. Yesterday, before the market opened, “The Street Ratings” downgraded EV Energy from “buy” to “hold”. At the start of the trading session, the stock opened 23 cents below the previous close of $59.76 and nosedived to $57.24 within half an hour of trading. The stock received some buying support at around $58.00, but was not enough to wipe out losses.

EV Energy ended yesterday’s trading session at $57.45 per share, down $2.31 or 3.9% on a volume of 616,581 shares.

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Published by Duncan Oleinic

Duncan Oleinic is from New Yourk. After graduating with a degree in physics, he began his career as an analyst in a broking firm. Through this experience he was able to advance to the role of correspondent for a U.S based financial news provider, where he worked from 2001 to 2007. He subsequently joined a merchant banking firm as a financial analyst focused on valuing unlisted companies in the sub-continent. Over the course of his two years here, he performed valuations of several media companies which were later acquired by peers.

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