Sweet 16 Update - July 27

[dan_s]

HP, RRC and WLL reported 2nd quarter results last week. All three beat my forecast.

I have updated the Sweet 16 spreadsheet and posted it under the Sweet 16 Tab. The spreadsheet shows my Fair Value Estimate for each company compared to the current First Call Price Forecast. I am expecting analysts to increase their price forecasts after they digest Q2 results and gain more confidence in oil prices. I oil stays over $100/bbl, Q3 results are going to be very strong.

As I posted earlier, Range Resources (RRC) now thinks they have up to 80 TCFE of recoverable gas and liquids. RRC already trades at a high multiple compared to the rest of the Sweet 16, but it deserves it since it has HUGE resource potential.

Whiting Petroleum (WLL) trades at less than 4X my CFPS estimate, which is a ridiculously low multiple for a company of this size and quality. I was pleased to see their strong results in the Niobrara.

We will be publishing updated profiles on HP, RRC and WLL next week. I am cracking the whip on the interns.

This coming week XEC, KOG, ROSE and SM will report Q2 results.

I will be commenting on Sweet 16 results at our luncheon on August 1 at The Hess Club.