Goodrich Petroleum (GDP) Update - Jan 14

Goodrich Petroleum (GDP) Update - Jan 14

Postby dan_s » Thu Jan 14, 2021 12:54 pm

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

Goodrich has already provided production and expense guidance for 2021.

Goodrich is as close as it gets to a "pure gasser". ~99% of their production is dry gas from East Texas and Louisiana. Since they get close to Henry Hub pricing for their gas, the company is going to report a big increase in production and revenues from Q3 to Q4 and another big production increase in Q1 2021 because they are completing nine high rate Haynesville gas wells this quarter. If Henry Hub gas prices come close to what I'm using in the forecast, GDP should generate close to $8.00/share of operating cash flow this year. In my opinion, this stock should be trading for AT LEAST 3X operating cash flow per share.

You can find my recent profile on the company under the Small-Cap tab on our website.

I think this is important to note: There are five analysts reports included in Reuters/First Call's price forecast of $14.33. They are all dated prior to November 11, more than two months ago. If Goodrich hits my Q4 2020 forecast and confirms their 2021 guidance, this small-cap should draw a lot of BUY recommendations.
Dan Steffens
Energy Prospectus Group
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