Permian Resources (PR) Valuation Update - Sept 4

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

Permian Resources (PR) Valuation Update - Sept 4

Post by dan_s »

Centennial Resource Development (CDEV) closed the acquisition of Colgate Energy Partners III on September 1 and Company was renamed Permian Resources (PR). CDEV is no longer traded and PR replaces it in our Small-Cap Growth Portfolio.

PR closed at $7.95 on September 2nd.
My initial valuation of PR is $14.50 based on the Company's guidance for Q4 2022 and the year 2023 (production of 150,000 to 165,000 Boepd).

PR is a pure play on the Delaware Basin, a sub-basin of the Permian Basin.
It has a lot of running room within the ~180,000 net acres under lease.

Permian Resources is running an eight-rig drilling program in the Delaware and plans to run a seven-rig program in November. The development program is expected to deliver production of 140,000-150,000 boe/d (52% oil) during the fourth quarter.

“Assuming anticipated activity levels of approximately 38- 42 gross wells spud and completed, total capital expenditures are estimated to be $300 million to $325 million during the quarter,” management said.

The company plans to spud about 145 gross wells and complete about 150 gross wells in 2023, with rig activity split nearly evenly between New Mexico and Texas.

The Company has a strong balance sheet and it is free cash flow positive today.
Free cash flow in 2023 should be approximately $1.2 billion, $2.18/share.

PR has a lot of upside for us. Buy it now before the Wall Street Gang figures it out.

Read more: https://www.naturalgasintel.com/newly-f ... -ceos-say/

My forecast/valuation model for PR has been posted to the EPG website.
Dan Steffens
Energy Prospectus Group
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