Permian Resources (PR) Valuation Update - Sept 6

Permian Resources (PR) Valuation Update - Sept 6

Postby dan_s » Tue Sep 06, 2022 9:21 am

PR opened this morning at $8.00/share. My initial valuation is $14.50, which is just over 3X my forecast operating cash flow per share forecast for 2023.

The Company has provided detailed guidance for Q4 2022 and preliminary guidance for 2023.
> Mid-point of Q4 production guidance is 145,000 Boepd (52% crude oil, 29% natural gas, 19% NGLs)
> My Q4 revenue estimate (net of cash settlements on their hedges and regional differentials) is $918 million.
> My Q4 operating cash flow estimate is $644 million, $1.14/share, which compares to TipRanks' consensus of $1.05. < So, today's share price is less than 2X annualized operating cash flow per share.

I just posted my profile on the Company to the EPG website. Read it carefully.

Read this: https://www.naturalgasintel.com/newly-formed-permian-resources-now-the-largest-permian-delaware-pure-play-ceos-say/

Permian Resources is led by co-CEOs Will Hickey, 35, and James Walter, 34, who co-founded privately held Colgate in 2015. < They are going to be making a lot of presentations to analysts and hedge fund managers over the next few weeks. This is the kind of hard charging company the Wall Street Gang loves.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 30119
Joined: Fri Apr 23, 2010 8:22 am

Re: Permian Resources (PR) Valuation Update - Sept 6

Postby dan_s » Tue Sep 06, 2022 10:20 am

Note received from Piper Sandler this morning.

"PR: We met with Permian Resources' co-CEO’s James Walter and Will Hickey, as well as Hays
Mabry, VP of IR, right ahead of the official close of the Centennial/Colgate merger. The company
subsequently released official 4Q22 and FY23 capital and production guidance and we updated
our estimates late last week (CDEV and Colgate Combine to Form Permian Resources). The
company’s message on activity was that for the time being it would run seven rigs and three
crews, but given strong drilling efficiencies at CDEV the company thinks it ultimately can drop to
six rigs and two crews and maintain a similar level of activity. With updated guidance Permian
Resources is running eight rigs for the time being which will result in higher capital spending than
we were anticipating in 2H22, and higher 2023 spending was driven by 20-25 net completions
above what we were projecting, and results in higher volumes and FCF vs. our prior estimate.
The company is expecting to deliver 10% 4Q23/4Q22 growth and guided FY23 production of
150-165 mboe/d (52% oil) but given the expected level of activity we think the company is setting
an achievable bar and should result in a beat/raise story in 2023, in our view." (Lear)
< The last sentence raises my confidence in my 2023 forecast.
Dan Steffens
Energy Prospectus Group
dan_s
 
Posts: 30119
Joined: Fri Apr 23, 2010 8:22 am


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