TPH Comments below after PXD's conference call:
PXD update – Remains a top safe-haven pick on balance sheet strength, vertical integration, FCF outlook 2019+ and ample upside to our $257/sh NAV at $65 WTI LT ($173.85 – B) – Rolling in more Jo Mill credit post a very promising update provides a nice but modest 5% bump to our NAV ($318/sh at $75 LT) as we await more results throughout the year. Continue to view name as a quality holding despite recent volatility. And while there may have been some noise around the corporate oil cut on the Q1 call, we still view ’17 as a strong year, modeling at the high-end of the 269-276mboepd guide (60% oil) vs. Street 273. Importantly, the company’s robust ’17-20, 3-year oil and cash flow CAGRs remain intact, at TPHe 20-25% and 30%, respectively, within CF at $55 by 2018 and FCF generative in 2019+. This leads to an attractive 5.7x EV / EBITDA multiple in 2020 given PXD’s long growth runway. 2017 remains catalyst rich with (i) continued Jo Mill de-risking utilizing v3.0 fracs, (ii) upcoming Clearfork and Wolfcamp D tests, (iii) planned 5,000lbs/ft completion tests and (iv) optimized Eagle Ford completions. Further, if crude weakens, PXD’s first class balance sheet can be bolstered by monetizations of its EF (TPHe ~$1.5B pre-optimization) and/or PXD’s legacy gas assets (26mboepd; TPHe $400-500mm).