Ranger Oil Corp (ROCC) - Dec 9

[dan_s]

We sent out an updated profile this morning on Ranger Oil. I urge all of you to read it carefully.

Ranger is now large enough to earn a promotion to the Sweet 16 and it "checks all of the boxes".
It has a strong balance sheet, is free cash flow positive now (~$50 million per quarter) and it has lots of "running room" (~750 low-risk / high-return horizontal drilling locations in the core of the South Texas Eagle Ford). Their two-rig drilling program in 2022 will be fully funded by operating cash flow and they should have plenty of FCF left over.

Plus:
> Less than 20% of their oil is covered by "Bad Hedges" in 2022, collars that have ceilings at $52 to $53.
> I like the production mix: 70% crude oil, 16% natural gas and 14% NGLs
> Low cash expenses including G&A cash profit margin per Boepd; $37.59/boe in Q3 2021 (see page 4 of the profile)

My current valuation is $54.00, but my valuation will be going up if their 2022 guidance matches my forecast assumptions.

Ranger Oil was created by the merger of Lonestar Resources into Penn Virginia. Since Q4 results will be the first full quarter since the merger, the Wall Street Gang is not yet fully aware of the potential. Based on the detailed guidance the company provided on December 6th, their Q4 results are going to be impressive.

[Fraser921]

https://seekingalpha.com/article/447426 ... icle+Smart