I have updated my forecast model for Sanchez Energy (SN) and posted it to the EPG website.
I have lowered my valuation to $14.50/share, compared to First Call's price target of $12.59.
SN posted impressive 2nd quarter results that crushed my forecast and they raised the midpoint of their production guidance.
Tony Sanchez gave one of the most impressive presentations at Enercom. SN is getting outstanding results in the Eagle Ford and they are driving down operating expenses and completed well costs. Cash on hand + cash flow from operations will more than cover their capital program for this year. The stock is trading at less than 2X 2015 cash flow per share. My forecast model is based on the their production guidance, but I think they will exceed guidance. 2nd quarter production was way above guidance. Tony know how to "under-promise and over-deliver".
~80% of 2H 2015 oil production is hedged at $73.23/bbl and their high btu gas sells at a premium to NYMEX.