Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Independent U.S. oil and gas driller Sanchez Energy Corp (NYSE:SN) stock jumped as much as 10% on March 3, following the company's earnings report, released after market trading hours on Monday afternoon.
So what: The company reported record revenues, but its losses came in larger than analysts were expecting. This led to the stock actually starting the trading day down. However, the stock price slowly climbed in the afternoon, peaking near 10% when management began its earnings conference call and disclosed that the company had reduced its well development costs by about 40% per well, meaning that the company can more profitably produce when oil prices are down. The company also reiterated that it would spend about 25% less in capital drilling in 2015, and that cash on hand and cash flow would cover its capital expenses this year.
Now what: The stock is up almost 40% so far in 2015, but still sits 65% below the peak last June. Even with the company's cost reductions and improved cost structure for well development, low oil prices will keep the near future a challenging environment for Sanchez and many of its smaller brethren.