Sweet 16 Update - March 5

[dan_s]

I have (finally) gotten all of the Sweet 16 forecast/valuation models updated for Q4 results and fresh guidance except for Earthstone Energy (ESTE) that will release Q4 2021 results next week.

The Sweet 16 summary spreadsheet will be posted to the EPG website by noon. It is best to download it to Excel so you can easily see my updated valuations.

Since my last update on February 23rd the Sweet 16 has gained 19.11% and is now up 34.45% YTD; due to strong Q4 2021 results and rising commodity prices.
During the same two-week period the S&P 500 Index gained 2.16%, but it is still down 9.18% YTD; due to FEAR of the Fed and inflation.

Despite the strong gains so far this year, the Sweet 16 is still trading 44% below what I estimate to be "Fair Value". Keep in mind that my "Fair Value Estimates" are based on WTI oil averaging $85/bbl in 2022 and $80/bbl in 2023. Natural gas prices are also holding up much better than I expected.

All 16 companies are up YTD from Comstock Resources (CRK) up 17.68% YTD to Range Resources (RRC) up 48.51% YTD. CRK trades at the deepest discount to my valuation of $21.00 per share.

I am expecting Earthstone's Q4 report and 2022 guidance to draw a lot of attention next week. My current valuation of $27.50 is likely to go up.

Unless there is a quick end to the war in Ukraine, I expect oil prices to go up. With several million barrels per day of Russian oil off the market, we are at the beginning of a global energy crisis. The oil shortage is the result of the "Covid Pandemic of Fear" and the "Failed Green New Deal", which in my opinion is a lie. FEAR is just being used to control the world's population, but the paradigm that wind and solar will somehow magically reduce oil demand is a FALSE PARADIGM. We need a balanced energy plan because if we don't get more intelligence in our governments there will be a big increase in "Energy Poverty".

I now need to start working on my podcast.