Whiting Petroleum Corp. (WLL): An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 tab. The model now assumes that the merger with Kodiak Oil & Gas (KOG) will close at the beginning of the 4th quarter of this year.
My "post-merger" Fair Value Estimate is $119/share.
IMO KOG shareholders that hang tough and take the WLL shares will be very happy they did by year-end. A bunch of analysts that never took a hard look at WLL or KOG are now looking at it. I think they will really like what they see. A bunch of fund managers will want to own the largest Bakken company
My valuation above is based on 7X operating cash flow per share ("CFPS"). Continental Resources (CLR) is currently trading at more than 7.6 X 2014 CFPS.
WLL Update
WLL Update
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: WLL Update
UBS upgraded Whiting Petroleum (WLL) to Buy citing the Kodiak Oil (KOG) acquisiton, which provides increased growth and immediate NAV accretion. Price target raised to $98 from $89.
I expect a lot more upgrades after they see Q2 results and get a handle on what the combined company looks like. WLL should be over $100 by year-end.
I expect a lot more upgrades after they see Q2 results and get a handle on what the combined company looks like. WLL should be over $100 by year-end.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: WLL Update
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: WLL Update
Wunderlich Securities analyst reiterated their buy recommendation and raised their target to $100/share.
Re: WLL Update
CEO James Volker said in the NY Times over the weekend that savings related to a potential deal could be a billion, with most of those savings occurring within five years time. On top of cost savings, the greater production would also give the company greater bargaining power with third party logistic service companies. They are responsible for the transport from the discounted Bakken oil to refiners, often located near coastal areas.
My last three years at Hess were spent working on deals like this. There is SIGNIFICANT cost saving, but it takes a few quarters before you start to see them.
This one is easier to model because WLL is not going to sell off a bunch of KOG assets. You really just need to add the two companies' financial statements together.
My last three years at Hess were spent working on deals like this. There is SIGNIFICANT cost saving, but it takes a few quarters before you start to see them.
This one is easier to model because WLL is not going to sell off a bunch of KOG assets. You really just need to add the two companies' financial statements together.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group