GPOR and PCE
GPOR and PCE
well GPOR hit the teens, glad i got out but with a loss, CPE about to hit the 200 day MA hope there is support there
Re: GPOR and PCE
I have gone over my forecast / valuation model for GPOR carefully. The big unknown is how the big SCOOP/STACK acquisition will impact 2017 and future production. So, I am basing my forecast on the low end of their preliminary production guidance for 2017 + 20% growth in 2018.
My forecast model is very close to the operating cash flow per share forecasts now shown by First Call.
Here is what First Call is showing by year:
2016: $2.98 < compares to my CFPS forecast of $3.15 < Some analyst do not included cash settlements on hedges in operating cash flows, I do.
2017: $3.90
2018: $5.42
2019: $8.42
Based on my forecast model, which is very close to what FC is now showing, Gulfport should generate $700 to $750 million in operating cash flows in 2017. More than 60% of their 2017 natural gas production is hedged at $3.17, so they don't have a lot of commodity price risk. Their 2016 CapEx budget was $550 million.
Until we know for sure when their Oklahoma acquisition will close, I have lowered the multiple of operating cash flow that I use to value GPOR from 10X to 9X.
My valuation of GPOR is now $40/share, which is slightly lower than what I had in the last newsletter. It compares to First Call's price target of $31.61, which by the way has drifted higher since they announced the SCOOP/STACK acquisition.
GPOR is down because this market is bearish on natural gas and fund managers are worried about the impact of the big acquisition in Oklahoma. Solid Q4 results, a good year-end reserve report and clarification of production guidance should help.
My forecast model is very close to the operating cash flow per share forecasts now shown by First Call.
Here is what First Call is showing by year:
2016: $2.98 < compares to my CFPS forecast of $3.15 < Some analyst do not included cash settlements on hedges in operating cash flows, I do.
2017: $3.90
2018: $5.42
2019: $8.42
Based on my forecast model, which is very close to what FC is now showing, Gulfport should generate $700 to $750 million in operating cash flows in 2017. More than 60% of their 2017 natural gas production is hedged at $3.17, so they don't have a lot of commodity price risk. Their 2016 CapEx budget was $550 million.
Until we know for sure when their Oklahoma acquisition will close, I have lowered the multiple of operating cash flow that I use to value GPOR from 10X to 9X.
My valuation of GPOR is now $40/share, which is slightly lower than what I had in the last newsletter. It compares to First Call's price target of $31.61, which by the way has drifted higher since they announced the SCOOP/STACK acquisition.
GPOR is down because this market is bearish on natural gas and fund managers are worried about the impact of the big acquisition in Oklahoma. Solid Q4 results, a good year-end reserve report and clarification of production guidance should help.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: GPOR and PCE
Why the lack of conviction in your valuation that is not even a month old?
Re: GPOR and PCE
The pullback in gas prices + I think it will take several quarters before Wall Street understands the value of their SCOOP/STACK acquisition. Considering where GPOR is trading today, I think a valuation of $40 is a fairly strong conviction.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group