Stone Energy’s Production Costs and Margins for 2Q16

Excluding hedges, in 2Q16, Stone Energy (SGY) reported a positive cash margin but a negative total margin.

Gains on crude oil (USO) and natural gas (UNG) hedges helped Stone Energy increase its cash margin and reduced the deficit in its total margin.

For 2Q16, upstream peers Diamondback Energy (FANG) and EOG Resources (EOG) have also reported positive cash margins.

Production cash cost is calculated by adding LOE (lease operating expenses) to production and ad valorem taxes, transportation expenses, G&A (general and administration) cash expenses, and interest expenses.

Total production cost is calculated by adding cash cost to DD&A (depletion, depreciation, and amortization) and other non-cash expenses.