Friday, April 24, 2015

Triangle Petroleum Delivers Strong Results, But Its Subsidiary Is Losing Steam

This article was first published by Seeking Alpha on April 15, 2015

By Sarfaraz A. Khan. Research Asst. David Richardsons

Triangle Petroleum (NYSEMKT:TPLM) has recently released its strong fourth quarter results in which the company's total revenues increased by 83.6% from the same quarter last year to $156.9 million. Revenues from its energy services subsidiary RockPile more than doubled to $83.97 million while hydrocarbon sales climbed 27.6% to $63 million thanks to 103.4% increase in production to 14,747 barrels of oil equivalents per day (boepd). This translated into adjusted earnings of $0.06 per share, down from $0.12 per share in the same quarter last year. However, the company's revenues, earnings and production numbers were better than markets' consensus estimates. The company managed to beat revenues and earnings estimates by $0.01 per share and $3.41 million respectively.

The top and bottom-line beat was driven by significantly better than expected production. In a report emailed to me, Topeka Capital Market's analyst Gabriele Sorbara wrote that Triangle Petroleum's output was ahead of the market's consensus estimate of 12,289 boepd. On the other hand, RockPile, despite delivering strong results, could actually weigh on the company's performance.

Triangle Petroleum formed RockPile in 2011 and the company began its operations by offering hydraulic fracturing services a year later in the Williston Basin. The addition of RockPile to Triangle Petroleum's portfolio has been great for the company as it has allowed the parent to increase its focus on its exploration and production work while opening a new revenue stream by offering RockPile's pressure pumping services to third parties. During the previous fiscal year, RockPile provided …… read full article at Seeking Alpha