Oil and gas producers in the U.S. continue to report mixed first-quarter results even as crude oil prices rebounded and cash flow improved as production rose.

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Apache Corp.

Houston-based Apache Corp. reported on May 1 adjusted earnings fell to $38 million in the first quarter from $124 million a year ago. The company’s first-quarter adjusted earnings per share of 10 cents was slightly below Street consensus of 12 cents, said Mark Lear, equity analyst with Jefferies LLC.

Despite the earnings miss, Apache’s EBITDA of $1.05 billion was ahead of Jefferies estimates for the quarter of $993 million, which Lear said was driven by higher international volumes and do-mestic gas volumes.

Apache has E&P operations in the U.S., Egypt and the U.K. The company is also gearing up fro exploration offshore Suriname.

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Apache’s adjusted production was up 19% year-over-year with 437,000 barrels of oil equivalent per day (boe/d) in first-quarter 2019. This is above estimates of 419,000 boe/d made by analysts from Tudor, Pickeirng, Holt & Co. (TPH). 

“Adjusted production beats on both total and oil were driven by Egypt and Permian [including Al-pine High] vs. our model, on better-than-expected capex,” TPH analysts said in a May 2 report.

In the Permian Basin, Apache generated record Permian Basin production of 248,000 boe/d, a 36% increase year-over-year, despite temporarily halting production at its Alpine High assets in late March due to low gas prices.

During the quarter, Apache said it also secured sales agreements for $300 million of noncore as-sets. A bulk of the divestitures is the company’s position in the Scoop and Stack shale plays in Ok-lahoma, said John J. Christmann IV, Apache’s CEO and president, during the company’s earnings call on May 2, according to a transcript by Seeking Alpha.

On May 2, Apache reiterated 2019 production guidance of 6%-10% from fourth-quarter 2018 to fourth-quarter 2019 on an unchanged annual upstream capex of $2.4 billion. 

Laredo Petroleum

Laredo Petroleum Inc., a Tulsa, Okla.-based producer which recently reconstructed its management team, reported on May 1 adjusted net income for the first quarter of $27.9 million, down from $57.6 million a year ago. Adjusted EBITDA was $122.9 million.

The company’s earnings per share of 12 cents came in clean compared to Street consensus of 10 cents, according to TPH analysts.

Laredo focuses in the Permian Basin of West Texas with over 140,000 gross acres, of which 85% is HBP, within the Midland sub-basin primarily in Glasscock and Reagan counties. During the fisrt quarter, the company announced several management changes including naming Mikell J. “Jason” Pigott on April 24 as the successor of Laredo CEO Randy A. Foutch following his retirement by the end of 2019.

RELATED: Laredo Petroleum Cuts Staff, Replaces CFO Amid Shareholder Pressure

Laredo produced 75,276 barrels of oil equivalent with 20 completions during the quarter, 33% more than originally anticipated. The company’s combined unit lease operating expenses and unit cash general and administrative expense was 5.42 per barrel of oil equivalent (boe), a roughly 11% decrease from full-year 2018 of $6.07 per boe.

Completion costs also declined driven by lower prices for in-basin sand and completion services. Laredo said it reduced per well capital costs by about $500,000 from originally budgeted amounts. The company’s per well capital cost decreased to about $7 million per well for a 10,000-foot horizontal.

The stock’s target price was raised to $5 per share, which reflects a 68% premium to the last close, wrote Dave Meats, CFA and a Morningstar analyst, said in a research report

“That makes it one of the most compelling ideas in the upstream oil and gas segment,” Meats wrote. “Only a year ago the stock was trading above $10, before the firm announced a midstream dispute with [Royal Dutch Shell Plc] that left it vulnerable to Permian Basin basis differentials right before a major pipeline capacity shortage took hold in the region.”

The company’s “subsequent failure of the firm’s downspacing initiative was a bigger driver,” he wrote. “This compromised well performance, leading to weaker initial production rates, and unexpectedly high oil declines.”

Morningstar was “spooked, but in hindsight that looks like a severe overreaction,” he wrote. 

Since Laredo has completed the last of its downspaced wells, “paving the way for a resurgence in well productivity during 2019 now that the firm has reverted to four to eight wells per drilling spacing unit in each reservoir layer,” he wrote.

Marathon Oil

Marathon Oil Corp., a Houston producer, reported earnings of 31 cents on May 1 beating Street consensus of 7 cents, according to TPH analysts.

The Houston-based producer’s adjusted net income rose in the first quarter to $256 million from $154 million a year ago. The company generated $80 million of organic free cash flow post dividend. Net operating cash flow was $515 million or $672 million before changes in working capital.

Marathon’s production for the quarter averaged 398,000 net boe/d. Total oil production averaged 203,000 net barrels per day (bbl/d), up 6% from a year ago. Meanwhile, U.S. oil production increased 11% to average 177,000 net bbl/d.

Marathon focuses primarily on U.S. resource plays, with more than 95% of its 2019 development capital allocated to its operations in the Bakken, Permian Basin, Eagle Ford Shale and Stack and Scoop shale plays.

Credit Suisse analyst William Featherston maintained its price target of $22 with a rating of outperform for Marathon Oil. The company did not change its 2019 capex/volume outlook, but the first quarter of capex “trending better than expected,” he wrote. 

The company reiterated 2019 production guidance of 410,000 to 430,000 boe.d or a 1%-6% year-over-year pro forma with oil volumes of 205,000 to 225,000 bbl/d or 10% year-over-year.

“No real surprises in [second-quarter 2019] guidance of 405,000-425,000 boe/d vs. consensus’ 419,000 boe/d—though investors may have grown accustomed to [Marathon’s] beat/raise trend over the past several quarters,” Featherston wrote. “At strip prices, we forecast [Marathon] generates over $1 billion of organic free cash flow surplus this year.”

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