SilverBow Resources (SBOW) Update - Sept 23

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

SilverBow Resources (SBOW) Update - Sept 23

Post by dan_s »

SBOW is one of the "gassers" in our Small-Cap Growth Portfolio, so it has a lot of upside for those of you that think natural gas and NGL prices will stay high through 2022. The Company's production mix is approximately 78% natural gas, 11% NGLs and 11% crude oil.

SBOW is currently trading for $21.94. First Call's price target is $34.50 and my valuation is now $50.00.

My updated forecast/valuation model has been posted to the EPG website. Note that my current valuation is only 3X 2021+2022 annualized operating cash flow per share. If commodity prices and their guidance for 2022 confirm my model assumptions, there is justification for a higher multiple.

SBOW has a very low share count, only 12.2 million shares outstanding at 6/30. Therefore a small change in the model assumptions has a big impact on the stock valuation. At this point, the RISK looks to be to the upside.
Dan Steffens
Energy Prospectus Group
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