http://seekingalpha.com/article/1319431 ... urce=yahoo
Positive Utica Results Powers Upgrades To These 2 Energy Stocks
Apr 4 2013, 00:47 by: Bret Jensen | includes: GPOR, REXX Disclosure: I am long GPOR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)
The market is finally going through what feels like a meaningful pull back to start the second quarter after more than four months of a continuous and pretty much drama free rally. I think it is time to make a shopping list to take advantage of any further pull back. I will be looking to add to my allocation to domestic energy concerns if this downdraft continues. The United States is still going through a significant ramp up of domestic energy production. In addition, M&A activity is picking up in the space and new shale regions are experiencing some of the same gains in production on a percentage basis as the much talked about Bakken shale region. Two energy stocks that had their price target raised substantially because of their operations in the Utica shale Wednesday look interesting here.
Gulfport Energy Corporation (GPOR) is an independent oil & gas company. The company's principal properties are located along the Louisiana Gulf Coast; in the Utica Shale, eastern Ohio; in the Niobrara Formation, northwestern Colorado; and in the Bakken Formation, western North Dakota and eastern Montana.
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4 reasons GPOR has upside from $44 a share:
Stern Agee bumped its price target from $60 to $80 on the shares. Analyst Tim Rezvan stated "Our analysis suggests shares do not reflect the likelihood of 100-acre spacing or 2 mmboe EUR wells in the Utica Shale. After analyzing Gulfport's Utica production and liquidity outlook, we increase 2014E EBITDA by 29% to $936 million".
Before the price target raise at Stern Agee, the median price target by the 16 analysts that cover the stock was $57 a share. Credit Suisse has an "Outperform" rating on the shares and recently moved its price target to $60 from $57.
Analysts also expect better than 90% revenue growth in FY2013 before more than doubling again in FY2014. The stock sports a five year projected PEG of under 1 (.87).
The company has consistently grown its operating cash flow which is up more than 110% over the last two completed fiscal years.
GPOR
Re: GPOR
From Barron's on-line today FWIW:
Credit Suisse
Within our small- and mid-sized exploration-and-production coverage universe, we look at cash-on-cash returns by focusing on three-year recycle ratios (cash flow per unit divided by unit organic finding-and-development costs) to determine which producers are efficiently running their operations.
Rex Energy (ticker: REXX), Range Resources (RRC) and Rosetta Resources (ROSE) stand out as the companies with recycle ratios meaningfully higher than the median of 1.6 times, while Penn Virginia (PVA) and Forest Oil (FST) screen as less efficient with recycle ratios of 0.1 times and 0.2 times, respectively.
For 2012, we estimate that all-in finding-and-development (F&D) costs (including revisions) increased to $23.82 per barrels of oil equivalent, up 34% year-over-year from $17.76 per barrel of oil equivalent at year-end 2011, while organic F&D costs (excluding revisions) increased to $18.31 per barrel of oil equivalent, up 44% year-over-year from $12.78 barrel of oil equivalent. Proved undeveloped (PUD) percentages for our coverage universe fell in the wake of weak natural-gas prices to 47% from 53% in 2011.
One method of gauging future asset efficiency are unit future development costs (FDCs), which came in at a median $19.06 per barrel of oil equivalent for 2012 versus $18.45 per barrel of oil equivalent in 2011. Rex, Comstock Resources (CRK) and Range Resources have the lowest per-unit future development cost at year-end 2012, while Forest Oil, Energy XXI (EXXI) and Gulfport Energy (GPOR) have the highest.
We also provide our analysis on 2012 F&D costs and reserve replacement for 65 producers that we track.
-- Mark Lear
-- David D. Lee
-- Sanya Thapa
Credit Suisse
Within our small- and mid-sized exploration-and-production coverage universe, we look at cash-on-cash returns by focusing on three-year recycle ratios (cash flow per unit divided by unit organic finding-and-development costs) to determine which producers are efficiently running their operations.
Rex Energy (ticker: REXX), Range Resources (RRC) and Rosetta Resources (ROSE) stand out as the companies with recycle ratios meaningfully higher than the median of 1.6 times, while Penn Virginia (PVA) and Forest Oil (FST) screen as less efficient with recycle ratios of 0.1 times and 0.2 times, respectively.
For 2012, we estimate that all-in finding-and-development (F&D) costs (including revisions) increased to $23.82 per barrels of oil equivalent, up 34% year-over-year from $17.76 per barrel of oil equivalent at year-end 2011, while organic F&D costs (excluding revisions) increased to $18.31 per barrel of oil equivalent, up 44% year-over-year from $12.78 barrel of oil equivalent. Proved undeveloped (PUD) percentages for our coverage universe fell in the wake of weak natural-gas prices to 47% from 53% in 2011.
One method of gauging future asset efficiency are unit future development costs (FDCs), which came in at a median $19.06 per barrel of oil equivalent for 2012 versus $18.45 per barrel of oil equivalent in 2011. Rex, Comstock Resources (CRK) and Range Resources have the lowest per-unit future development cost at year-end 2012, while Forest Oil, Energy XXI (EXXI) and Gulfport Energy (GPOR) have the highest.
We also provide our analysis on 2012 F&D costs and reserve replacement for 65 producers that we track.
-- Mark Lear
-- David D. Lee
-- Sanya Thapa