XEC + COG Merger Update - May 25

XEC + COG Merger Update - May 25

Postby dan_s » Tue May 25, 2021 3:07 pm

At least two of the Wall Street Gang likes COG. I have seen Gabriele's reports and price targets on upstream companies for many years. He covers most of our Sweet 16 and Small-Cap Growth Portfolio companies. He is generally conservative on his price forecasts.
Also on 5-24-2021 Raymond James's rated COG a BUY with a price target of $22.00.


At the time of this post, COG is trading at $16.47.
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May 24, 2021: Siebert Williams (NYSE:WMB) Shank & Co analyst Gabriele Sorbara maintained a Buy rating on Cabot (NYSE:CBT) Oil & Gas Corp. on Monday, setting a price target of $25.00

Sorbara expects Cabot Oil & Gas Corp. to post earnings per share (EPS) of $0.32 for the second quarter of 2021.

The current consensus among 12 TipRanks analysts is for a Moderate Buy rating of shares in Cabot Oil & Gas, with an average price target of $20.96. < Keep in mind that 11 of the 12 are dated before the merger was announced. The analysts price targets range from a high of $25 to a low of $17.

In its latest earnings report, released on 03/31/2021, the company reported a quarterly revenue of $459.68 million and a net profit of $175.37 million. The company's market cap is $7.11 billion.
Dan Steffens
Energy Prospectus Group
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Re: XEC + COG Merger Update - May 25

Postby dan_s » Tue May 25, 2021 3:33 pm

You pay me the Big Bucks for your EPG membership, so take a hard look at my forecast/valuation model for COG.

I have updated my forecast for COG and posted it to the EPG website.
COG is very easy to model because almost 100% of their production is dry gas from the Marcellus Shale in PA.
They also have consistent operating, gathering and transportation expenses of approximately $0.75/mcf.
My production forecast is that they will keep production flat to what it was in Q1 2021 of 2,287,200 mcfpd. This agrees with the Cimarex merger slides.
The gas price I'm using includes regional and BTU adjustments + cash settlements on their hedges.
When HH gas averaged about $2.60 in Q1, COG's realized gas price was $2.31/mcf.

As a stand alone company, COG is on-pace to generate approximately $600 million of free cash flow from operations.

As a stand alone company, my valuation of COG is $24/share, making the merger a good deal for current XEC shareholders.

Now my next task is to merge my COG forecast model with my Cimarex (XEC) model. That is more difficult, so I will focus on that tomorrow.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 25582
Joined: Fri Apr 23, 2010 8:22 am


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