I agree that RRC is a Prime Takeover Target. The National Oil Companies ("NOG") are very keen on the Marcellus.
http://seekingalpha.com/article/361751- ... urce=yahoo
IMO SD has too much debt.
Others that IMO are Takeover Targets: CLR, DNR, GPOR, GEOI, OAS, ROSE, COG, EOG, XEC, KOG, PXP. MIND is a potential "Take Private" candidate since it is debt free and generating a ton of cash flow. GTE and PMG may be of interest to a major wanting to get into South America. TGA is a takeover target whenever Ross decides to cash out.
RRC: Takeover Target
RRC: Takeover Target
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
RRC: Takeover Target
S&P DOWNGRADES OPINION ON SHARES OF RANGE RESOURCES TO STRONG SELL FROM HOLD
The shares are up over 45% since '10, despite a major drop in natural gas prices. We think premium
valuations reflect growth, a leading Marcellus position and a flurry of M&A deals at the play.
On weak gas, we cut our Q4 and '11 EPS estimates by $0.02 to $0.25 and $1.02; '12's by $0.44 to $0.85, and set '13's at $1.25.
Our '12 and '13 estimates are 29% and 40% below Capital IQ consensus and we think '13 consensus assumes gas prices over $5/Mcf.
We cut our target price $17 to $53, on premium multiples, NAV and DCF.
We no longer think gas markets can support RRC's lofty valuation.
The shares are up over 45% since '10, despite a major drop in natural gas prices. We think premium
valuations reflect growth, a leading Marcellus position and a flurry of M&A deals at the play.
On weak gas, we cut our Q4 and '11 EPS estimates by $0.02 to $0.25 and $1.02; '12's by $0.44 to $0.85, and set '13's at $1.25.
Our '12 and '13 estimates are 29% and 40% below Capital IQ consensus and we think '13 consensus assumes gas prices over $5/Mcf.
We cut our target price $17 to $53, on premium multiples, NAV and DCF.
We no longer think gas markets can support RRC's lofty valuation.
Re: RRC: Takeover Target
On January 17, 2012 RRC announced that 75% of their 2012 NG
production is hedged at a weighted average floor of $4.45/Mmbtu.
RRC releases 4th quarter results after the markets close today. I will update my forecast model tomorrow.
RRC does have a lot of nat gas but they are focused on increasing liquids production now. They have several years of drilling inventory in the liquid prone area of the Marcellus.
production is hedged at a weighted average floor of $4.45/Mmbtu.
RRC releases 4th quarter results after the markets close today. I will update my forecast model tomorrow.
RRC does have a lot of nat gas but they are focused on increasing liquids production now. They have several years of drilling inventory in the liquid prone area of the Marcellus.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: RRC: Takeover Target
RRC: Adjusted net income comparable to analysts` estimates, a non-GAAP measure, was $176 million ($1.11 per diluted share) for 2011, almost double the prior year amount of $89 million ($0.56 per diluted share). Cash flow from operations before changes in working capital, a non-GAAP measure, increased 28% to $737 million versus $577 million for the previous year. Comparing these amounts to analysts` average First Call consensus estimates, the Company`s earnings per share ($1.11 per diluted share) exceeded the consensus of analysts` estimates of $1.06 per diluted share. Cash flow per share ($4.62 per diluted share) for the year also exceeded the consensus analysts` estimates of $4.30 per diluted share.
4th quarter was slightly less than my forecast but still very good, considering the dip in natural gas prices.
4th quarter was slightly less than my forecast but still very good, considering the dip in natural gas prices.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: RRC: Takeover Target
This is why RRC is a Takeover Target and why it is in the Sweet 16.
Proved reserves increased 14% year-over-year to 5.1 Tcfe. Without giving effect to the sale of the Barnett properties, the year-over-year proved reserve increase would have been 43%. All-in finding and development cost averaged $0.89 per mcfe, with all-in reserve replacement of 850%. Drill bit only finding cost averaged $0.76 per mcfe. Production and reserve growth per share, on a debt-adjusted basis, reached 12% in 2011, representing the sixth consecutive year of double-digit per-share growth for both production and reserves. Range`s unrisked unproved resource potential at year-end 2011 increased to 44 - 60 Tcfe up from 35 - 52 Tcfe at year-end 2010.
Now keep in mind that RRC has 75% of 2012 natural gas production hedged at $4.45/mcf.
Proved reserves increased 14% year-over-year to 5.1 Tcfe. Without giving effect to the sale of the Barnett properties, the year-over-year proved reserve increase would have been 43%. All-in finding and development cost averaged $0.89 per mcfe, with all-in reserve replacement of 850%. Drill bit only finding cost averaged $0.76 per mcfe. Production and reserve growth per share, on a debt-adjusted basis, reached 12% in 2011, representing the sixth consecutive year of double-digit per-share growth for both production and reserves. Range`s unrisked unproved resource potential at year-end 2011 increased to 44 - 60 Tcfe up from 35 - 52 Tcfe at year-end 2010.
Now keep in mind that RRC has 75% of 2012 natural gas production hedged at $4.45/mcf.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: RRC: Takeover Target
Per my forecast model, RRC will generate about $960 million cash flow from operation (based on 30% production growth).
RANGE RESOURCES CORPORATION (NYSE: RRC - News) today announced its 2012 capital expenditure budget has been set at $1.6 billion. The capital budget includes $1.3 billion for drilling and recompletions, $215 million for leasehold, $47 million for seismic and $73 million for pipelines and facilities. Approximately 75% of the budget will be targeted toward liquids-rich and oil projects predominately in the Marcellus Shale and horizontal Mississippian plays. As a result of its capital program, Range has increased its 2012 production growth target to 30 - 35%. For 2012, all-in finding and development costs are projected to average $1.00 per mcfe or less.
In setting its 2012 capital expenditure budget, Range estimated projected drilling returns in each of its core areas, which demonstrated that at current strip prices that the 2012 capital program is expected to generate projected drilling returns ranging between 27% to 99%. Given the current natural gas price environment, capital spending for dry gas projects has been reduced to only 25% of the budget, almost all of which is associated with Marcellus Shale drilling in northeastern Pennsylvania. At current strip prices, the Marcellus Shale wells in northeastern Pennsylvania generate a projected return of 27% to 32%.
RANGE RESOURCES CORPORATION (NYSE: RRC - News) today announced its 2012 capital expenditure budget has been set at $1.6 billion. The capital budget includes $1.3 billion for drilling and recompletions, $215 million for leasehold, $47 million for seismic and $73 million for pipelines and facilities. Approximately 75% of the budget will be targeted toward liquids-rich and oil projects predominately in the Marcellus Shale and horizontal Mississippian plays. As a result of its capital program, Range has increased its 2012 production growth target to 30 - 35%. For 2012, all-in finding and development costs are projected to average $1.00 per mcfe or less.
In setting its 2012 capital expenditure budget, Range estimated projected drilling returns in each of its core areas, which demonstrated that at current strip prices that the 2012 capital program is expected to generate projected drilling returns ranging between 27% to 99%. Given the current natural gas price environment, capital spending for dry gas projects has been reduced to only 25% of the budget, almost all of which is associated with Marcellus Shale drilling in northeastern Pennsylvania. At current strip prices, the Marcellus Shale wells in northeastern Pennsylvania generate a projected return of 27% to 32%.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group