Sweet 16 Update - January 26

[dan_s]

Coming up this week will be the 4th quarter results for EXXI and HP. Both companies are on fiscal years other than December, so they do not have to wait on a year-end audit like the rest of the pack. I am expecting both companies to report very strong quarterly results on January 31st. Take a hard look at the positive results Energy XXI is getting on their horizontal development wells in the GOM.

Each weekend I take a hard look at First Call's price targets for each company in the portfolio. This past week First Call increased the price targets on 13 of the 16 companies in the portfolio. UNT's target was unchanged at $58.50/share.

The two companies whose price targets moved slightly lower were Kodiak Oil & Gas (KOG) to $11.11/share and Swift Energy (SFY) to $26.17/share. Note that both are still well above where the stocks closed on Friday. KOG should move higher if they come anywhere close to the 27,000 boepd exit rate they have been telling the analysts for months now.

I am expecting the price target for Continental Resources (CLR) to be raised next week after analysts digest the massive increase in their proven reserves (based on an independent 3rd party engineering firm). Their 4th quarter production was slightly less than what I had in my forecast model but current production is up another 9% to 116,000 boepd. CLR's production was 61,788 boepd in 2011, to give you an idea of the incredible growth potential this company has. They are just getting started in developing their Bakken acreage. Their new play in Oklahoma is adding another significant layer of production and reserve growth potential. Their goal is to be producing over 300,000 boepd by 2017 and my guess is that they reach it early.

I will have a lot more on the Sweet 16 Growth Portfolio plus our new Small-Cap Grow Portfolio in Tuesday's newsletter.

[dan_s]

Good analysis of CLR
http://seekingalpha.com/article/1134941 ... urce=yahoo

[dan_s]

An updated Net Income & Cash Flow Forecast model for Continental Resources (CLR) has been posted under the Sweet 16 Tab.

My Fair Value Estimate has been updated to reflect the company's significant increase in proven reserves. The Fair Value Estimate can be found at the bottom of the forecast model.

[dan_s]

Each weekend I update the Sweet 16 Growth Portfolio Forecast Spreadsheet. EPG members can find it under the Sweet 16 Tab. Just log on, click on the Sweet 16 tab, then click on the "Sweet 16 Forecasts" link.

Tab One is a summary of the individual company net income and cash flow forecasts, which you can find by clicking on the individual company logos.

Tab Two shows the percentage moves in each company's share price YTD and since I added it to the Sweet 16. It also shows my Fair Value Estimate ( my guess at today's break-up value ) compared to First Call's Price Target.

IMO this Excel spreadsheet is a very valuable tool. You can use it to compare the Sweet 16 companies against each other but you can also use it to compare other E&P companies to this rock solid pack of growing companies. The Sweet 16 is a "growth" portfolio. For an E&P company to even be considered it must have double digit production and reserve growth locked in. The same can be said for our new Small-Cap Growth Portfolio, which you can find in my newsletter.