PDC Energy (PDCE) Update - Sept 15

[dan_s]

From Stifel on 9-15-2020

PDC Energy (PDCE, $12.26, Buy; Target $20.00)
Anticipating Rule Change, Lowering Target, Reiterating Buy - Michael S. Scialla
Last week, the COGCC indicated that it favors increasing the setback distance for Colorado's new oil and gas wells to 2,000 feet from 500 feet. While a final vote on the decision is not expected until next month, we are lowering our NAV estimate and price target in anticipation of a rule change. We reiterate our Buy rating as the stock offers one of the most attractive combinations of FCF yield and DAPPS in our mid-cap E&P universe. We note the rule change will not impact our 2020-2022 estimates.
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With modern rigs able to drill two mile long laterals, I don't think increasing the setback of the drillsite from 500 to 2,000 feet is a big deal.