SilverBow Resources (SBOW) Update - April 19

[dan_s]

Mon, April 19, 2021, 8:05 AM

SilverBow Resources, Inc. (NYSE: SBOW) ("SilverBow" or "the Company") today provided an operational and financial update including the successful extension of its senior secured revolving credit facility (the "Credit Facility").

Read: https://finance.yahoo.com/news/silverbo ... 00614.html

My valuation is now $22/share.

[dan_s]

I have posted my forecast/valuation and update profile for SBOW to the EPG website.

This small-cap should be more than a double for us this year.

[ajootian]

Thanks for picking up coverage of this company Dan. They said they got $4.97 for their gas last quarter (no doubt due to the Texas Freeze). Just curious why you are not using that figure in your projection. They said they paid down debt by $30M last quarter -- the only way that could've happened is that they got a big windfall from the Texas Freeze.

[dan_s]

They did not mention their realized NGL price, so I want to make sure they aren't talking about their combined ngas+ngl price. If that was just their ngas price, they are definitely going to report blowout Q1 results.
The numbers look very good, so if Q1 results and fresh guidance match up with my model, the stock valuation will go over $30.
Webb County could be a VERY BIG DEAL for a company of this size.

[dan_s]

I have updated my SilverBow forecast/valuation for the Q1 realized prices of $4.97/mcf for natural gas and $42.74/bbl for crude oil and posted it to the EPG website. SilverBow did not provide their realized NGL price, but $20/bbl should be close.

SilverBow must have been able to sell a lot of gas into the West Texas spot market during the big Texas Freeze in February. Their realized oil price is low because they have 91% of their oil hedged at below strip prices this year. On a BOE basis only ~10% of the Company's production is crude oil.

Based on my model, SilverBow should report "Adjusted Net Income Per Share" of more than $2.40 just for Q1. Keep in mind that GAAP or "Reported Net Income" will include mark-to-mark adjustments on their hedges. The MTM increase in the value of their ngas hedges should more than offset the MTM decrease in value of their oil hedges. Q1 operating cash flow should exceed $50 million.

SBOW is trading below 1X my operating cash flow per share forecast.