Stifel is raising their oil & gas price decks - Oct 20

[dan_s]

From the Stifel Equity Research Team

Energy & Power - Q321 U.S. E&P and Biofuels Earnings Preview - Derrick Whitfield
In preparation for the upcoming Q321 earnings season, we are updating our commodity estimates to reflect strip prices through 2023, increasing our long-term WTI and HH price assumptions from $55.00/bbl and $2.75/mcf to $60.00/bbl and $3.00/mcf, and revising our production and capital forecasts to reflect recent discussions with management.
In short, we are adjusting 2021/2022 estimates for rig count (0.7%/1.4%), capex (1.1%/1.3%), and EBITDAX (6.6%/19.1%) and increasing our 12-month price targets (19.2%).
We are also outlining the most impactful themes and catalysts for the sector and coverage universe. For Q321 earnings, we believe investors are keenly focused on 2022 E&P capital and operational plans (assessing resolve to remain capital disciplined), the operating/regulatory environment under a Biden presidency and management views on the M&A environment.
Lastly, we are highlighting AMTX and Comstock Resources (CRK) as a focus names for the quarter as the stocks screen well on our quantitative (CRK - price-performance vs. cash flow revisions, EV asset test) and thematic (AMTX - ESG, CRK - natural gas exposure) assessments.
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Despite Stifel's oil & gas price deck being much lower than the commodity prices that I am using for 2022 ($70 WTI and $3.50 HH gas), their price targets are close to my stock valuations. Most of the Wall Street Gang does use lower commodity prices in their models just because it is easier to move their BUY rated stocks up than it is to move them down.