Energy & Mining

Jones Energy Inc (NYSE:JONE) Provides Corporate Updates

Jones Energy Inc (NYSE:JONE)

Jones Energy Inc (NYSE:JONE) released an operations update, its 2016 year-end reserves, its initial capital budget, and guidance for 2017. The company reported that first Merge wells the HARDY 25-11-6 1WH and BENNETT 24-11-6 1WH both drilled magnificently with closes underway. It started drilling third well, the BELYEU 33-9-5 1WH. Also, it added almost 3,140 net acres to its Merge position to-date subsequent to the acquisition closing. As of now, the firm’s Merge position is almost 21,000 net acres.

Operational update

The initial capital budget for this year stands at $275 million, of which around $110 million will be focused on Merge drilling and closures. Production for FY2016 was 19.2 MBoe/d while oil production for 4Q2016 was 4.5 MBbl/d.  As per operational update, proved reserves at close of year stood at 105.2 MMBoe grounded on SEC pricing1 while proved oil reserves stood at 23.6 MMBbl. Also, proved reserves at the close of year 2016 came at 82.1 MMBoe in the Cleveland while it was 2.4 MMBoe in the Merge. The liquidity stood at almost $282 million as of close of December 2016.

The CEO speaks

Jonny Jones, the Chairman and CEO of Jones Energy, reported that 2016 was a remarkable year for their company, as they took major steps to enhance their balance sheet and bring down costs permitting them to restart their Cleveland drilling program. Moreover, the company reported the acquisition of almost 18,000 net acre area in the Merge, which is a leading operated site in the Eastern Anadarko Basin.

Jones Energy CEO reported that this development has transformed their opportunity set as well as their asset base. The Merge program started in 2016 with the preliminary rig arranged to the field drilling a 2-well pad. It is initial days, but the management is positive that additional upside from their acquisition assumptions have emerged with increased potential landing points noted, counterbalance operator density assessments and early-time outperformance from neighboring wells.

Strong report from offset operators and increased activity in the region additionally supports their beliefs that Merge is a leading U.S. onshore resource plays. Jones further added that last year they met and surpassed their goals, increasing production guidance by 7% and enhancing cost structure across the managed program.

The shares of Jones Energy reported that gained over 3% on Monday, and ended the session at $3.25. With the last reported gains, the market cap of firm now stands at $277.83 million.

Ticker Symbol JONE
Last Price a/o 3:21 PM EST  $3.15
Average Volume  1.02M
Market Cap (mlns)  286.72M
Sales (mlns) 126.60M
Shares Outstanding (mlns) 88.22M
Share Float (mlns) 54.96M
Shortable Yes
Optionable Yes
Inside Ownership 1.70%
Short Float 28.93%
Short Interest Ratio 15.54
Quarterly Return -29.35%
YTD Return -35.00%
Year Return 28.46%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

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Monica has an undergraduate degree in Accounting and an MBA she earned - with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

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