SilverBow Resources (SBOW) Price Target - Sept 16

[dan_s]

Note from Neal Dingmann at Truist Financial on 9-16-2022

SilverBow Resources, Inc. (SBOW, $38.03, Buy) - Continuing
to Add Scale with Another Positive Deal - Silverbow announced
an increase in its Webb County position carving out a section
in the Dorado play with plans to run a dedicated rig across the
county given the strong economics. While the capital spent to-
date in the play represents a small investment (~6% of mkt cap),
we expect this activity/capital spend to increase as the company
takes advantage of the strong natural gas strip and the highly
gassy nature of this play.

Neal's price target is $62.00

[Fraser921]

SBOW had an update in August

https://s23.q4cdn.com/985396181/files/d ... t-2022.pdf

See slide 4

At that time:

Market Cap was 1.0 b
Debt was .6
---------------------------
Ev was 1.6 b

PV10 was 1.8b

Since then the stock is down 30 % and EV is now 1.3 b vs 1.8 B

2023 ebitda is 700 m ...1.3/.7 is less than 2 x

They spent 50 m to add to core acreage and the name was slammed on Friday, down 10.6 % on a combination of slide in energy names, ng in particular, and this deal which subtracts from FCF in the short term.

This is a buying opportunity! I added on Friday

Playing with Dan's model, (and trying to be very conservative) 2023 ebitda times 3x (instead of 5.5 x), with no change in ebitda from the acquisition would yield a price of (3 *700= 2.1 b less debt -.7) = 1.4 b which is 2 x current stock price 33 gives a price of $ 66

I don't understand why this name is so cheap.

[Fraser921]

Am I the only guy buying this name?

[ChuckGeb]

You are not alone my friend.
Per new release mgt estimates 650bcf of recoverable resource from new acreage. They added a rig first of July. Take a few months to build some scale but the spending of more cash flow at current pricing will payoff nicely for shareholders. They need to get a luncheon and webinar on Dan’s calendar to spread the word though most of this year they have been very busy closing acquisitions. They are running 1 gas rig and one oil rig. Drilling Webb County gas wells that produce 15mmcf +/-a day into premium gas markets should payoff nicely.

[yves@groupelm.ca]

Just add for 75K today. You are not alone !!

[dan_s]

When we get back from Mexico, I will push them harder to get on our webinar schedule. Yes they have been extremely busy.