SilverBow Resources (SBOW) Update - Dec 22

[dan_s]

I finished up the profile on SilverBow late yesterday and posted it to the EPG website along with the updated forecast. It is an addition to our Small-Cap Growth Portfolio.

SilverBow has ~30,000 BOE per day of production. ~84% natural gas and NGLs.
It is on-track to generate ~$52 million of free cash flow from operations in 2020, despite shutting in a lot of production in Q2 and Q3.
They are completing a batch of high-rate gas wells in December that will give revenues a nice boost in Q1. My Q4 production forecast is probably too low.
Their bankers lowered their credit facility from $330 million to $310 million on November 2nd, but the Company still has over $50 million of liquidity.
What they have in Webb County, Texas looks very promising. EOG Resources recently announced a BIG new gas field in Webb County.
Take a hard look a the RED BOX on the forecast model: First Call's operating cash flow per share forecasts are $11.18 for 2020 and $10.65 for 2021. < SBOW closed at $5.44 yesterday.
My 2021 forecast is $7.24 earnings per share and $10.41 operating cash flow per share. < This stock has a forward PE ratio of under 1
SilverBow should be able to fund a 15 to 20 well program in 2021 entirely with cash flow from operations.

Like all of the upstream companies, SilverBow was required to book large non-cash impairment charges in 1H 2020. Thanks to rising gas and NGL prices, those assets are no longer impaired.