SandRidge Energy Inc. (SD), Heckmann Corporation (HEK): Corporate America’s Newest Excuse

Source: SandRidge Energy.

The first quarter is a notoriously slow one for the oil and gas industry, because the weather really does play a factor. However, the weather this past quarter was worse than most energy companies were expecting. BreitBurn Energy Partners L.P. (NASDAQ:BBEP) COO Mark Pease pointed to this fact in his remarks on the company’s conference call. In talking about its production in Wyoming, he said that lower production at its gas wells was “primarily due to the harsh winter weather, which increased downtime compared to forecast.” He went on to say that the company “typically experienced lower production in the first half of the year for our operations in states with winter weather conditions.” He continued: “Because of the additional cost of working in the winter season, drilling activity was relatively slow.” One thing was clear in the quarter: While bad weather was anticipated, the weather was worse than anyone projected.

That being said, BreitBurn, Linn Energy LLC (NASDAQ:LINE), and Heckmann Corporation (NYSE:HEK) all share one thing in common. Each missed earnings expectations and all made mention that the weather was a factor. I’m not saying that it wasn’t, but what’s interesting is that SandRidge Energy Inc. (NYSE:SD), too, pointed to some problems with the weather, yet it didn’t have any trouble meeting expectations. I say this not to suggest that anything is amiss at the companies that missed, but just to point out that when a company like SandRidge Energy Inc. (NYSE:SD) can beat the numbers despite the weather, it’s a reason to boast.

It’s quite obvious that weather legitimately affected these businesses, yet not all were affected to the same degree. In this case, SandRidge Energy Inc. (NYSE:SD) simply had the strongest quarter which is why the company was able to overcome the weather issues. That’s interesting when you consider that SandRidge Energy Inc. (NYSE:SD) is the least diversified of the group operating really in only two regions.

It just goes to show that when your business is doing well, nothing can stop it, and when things are a little light, well, just blame it on the weather.

The article Corporate America’s Newest Excuse originally appeared on Fool.com is written by Matt DiLallo.

Fool contributor Matt DiLallo owns shares of Linn Energy and Heckmann and also has short June 2013 $4 puts on Heckmann. The Motley Fool recommends BreitBurn Energy Partners, owns shares of Heckmann, and has options on Heckmann.

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