Goodrich Petroleum (GDP) Update - August 12

[dan_s]

I have updated my forecast model for GDP and posted it to the EPG website.

> GDP's production is 98% natural gas, with most of it coming from the Haynesville
> The Company is on-track to ~100% year-over-year production growth in 2019 and should add another ~40% YOY production growth in 2020.
> Two analysts have updated their forecasts on GDP since the company announced strong Q2 results. Their updated price targets are $16 & $23.
> GDP will complete two new high-rate horizontal wells in Q3 and five more in Q4; just in time for higher winter gas prices.
> GDP's natural gas price in Q2 (including cash settlements on their hedges) was $2.54/mcf and should be approximately $2.40/mcf in 2H 2019.

All "gassers" are currently out-of-favor, but GDP is a keeper in our Small-Cap Growth Portfolio because it has strong production growth locked in and s/b able to fund their growth beyond 2019 entirely with cash flow from operations.
Their cash flow from operations this year s/b ~$6.00/share. First Call's CFPS forecast for 2020 is $8.28 as of the date of this post.