Goodrich Petroleum - Friday's luncheon host

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dan_s
Posts: 37335
Joined: Fri Apr 23, 2010 8:22 am

Goodrich Petroleum - Friday's luncheon host

Post by dan_s »

I was extremely impressed by Rob Turnham's presentation. GDP has a LOT OF UPSIDE for us. It is trading a less than half of my valuation and after what I heard today, my valuation will be going up.

John White, the top energy sector analyst at Roth Capital, attended and we had a nice conversation. John told me that GDP, ESTE and REI are the top three best values of all of the upstream companies that he follows and he follows a lot of them.

We will be publishing updated profiles on SN, GDP, ESTE and REI next week.

The slides that Rob Turnham spoke from today s/b up on the EPG website later today.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 37335
Joined: Fri Apr 23, 2010 8:22 am

Re: Goodrich Petroleum - Friday's luncheon host

Post by dan_s »

In the last 3 months, 4 ranked analysts set 12-month price targets for GDP. The average price target among the analysts is $17.67.

John White's valuation is $23.00/share, which he told our attendees at the luncheon in Houston on Friday.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 37335
Joined: Fri Apr 23, 2010 8:22 am

Re: Goodrich Petroleum - Friday's luncheon host

Post by dan_s »

I have updated my forecast/valuation model for GDP based on the NEW GUIDANCE for 2018 and 2019 that they presented at our luncheon today. The guidance is shown on the last page of their presentation slides which you can download from the EPG website.

Based on my updated forecast model, operating cash flow per share should be:
$4.00 to $4.50 in 2018, which compares to First Call's estimate of $4.28
$6.00 to $7.00 in 2019, which compares to First Call's estimate of $7.13

My updated valuation will be in the new profile which we will be sending out via email this weekend.

My updated forecast/valuation model can be found on the EPG website.
Dan Steffens
Energy Prospectus Group
k1f
Posts: 455
Joined: Tue May 04, 2010 9:47 am

Re: Goodrich Petroleum - Friday's luncheon host

Post by k1f »

Dan, what is Goodrich's production mix like these days?
How is John White feeling about PQ given its recent punishment?
dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Re: Goodrich Petroleum - Friday's luncheon host

Post by dan_s »

Per John White: PQ has some serious problems.
MY TAKE: They have some good leasehold, but too much debt. They need a financial partner to fund some of their drilling program because they are getting close to being tapped out on the credit line. It is not hopeless, but not good. Problem is that VC's are not interested in gas these days.

GDP's production mix is shown on the last slide of their presentation. 95% natural gas in 2018.

Rob said they will probably sell their Eagle Ford leasehold.

Well level economics in the Haynesville are FANTASTIC. The wells payout in 9 to 12 months and will produce for over a decade. Most of the new wells will have 10,000 ft. laterals. See type cures on slide 26. EURs are over 25 BCF per well. Wells cost around $8 million to complete to sales. LOE on these new high rate wells are less than 10 cents per mcf. Cash margins are incredible.
Dan Steffens
Energy Prospectus Group
ChuckGeb
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Joined: Thu Nov 21, 2013 2:46 pm

Re: Goodrich Petroleum - Friday's luncheon host

Post by ChuckGeb »

Goodrich presentation was impressive. Kudos for recruiting such a high quality company to present. I had wondered what happened to all their debt and TMS leasehold and now I know.
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