My forecast assumed 81,000 Boepd for Q2. - Dan
DENVER, Aug. 08, 2017 (GLOBE NEWSWIRE) -- PDC Energy, Inc. ("PDC" or the "Company") (PDCE) today reported its 2017 second quarter operating and financial results.
Second Quarter 2017 Highlights
Production of 8.0 million barrels of oil equivalent (“MMBoe”), a 54 percent increase year-over-year; daily production of approximately 88,100 barrels of oil equivalent (“Boe”).
Oil production of 3.2 million barrels (“MMBbls”), a 62 percent increase year-over-year and 29 percent increase compared to the first quarter of 2017.
Delaware basin production averaged 10,047 Boe per day.
Wattenberg drilling efficiency increased approximately 15 percent.
Lease operating expenses (“LOE”) of $2.50 per Boe, a 16 percent decrease compared to the first quarter of 2017.
Liquidity of approximately $900 million, including $202 million of cash, resulting in a leverage ratio of 1.9 times, as defined by the Company’s credit agreement.
CEO Commentary
President and Chief Executive Officer, Bart Brookman commented, “Our quarterly production results demonstrate improved capital efficiencies and completion enhancements in Wattenberg, as well as the momentum we are building in the Delaware Basin. In Wattenberg, we further reduced drilling times, which will allow us to drop our rig count to three this October and maintain a similar pace of development. We have great operational flexibility in both basins to increase or decrease our rig counts depending on market conditions. Lastly, we are excited by the work of our operating teams in not only delivering strong recent well results in the Delaware Basin, but improving our operating cost structure in the quarter. ”
PDC Energy Q2 Results
PDC Energy Q2 Results
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: PDC Energy Q2 Results
The share price is down today because the company is cutting back on their drilling & production program this year because of lower oil & gas prices. In my opinion, this is just good business sense. I will assume the low end of their new production guidance in my forecast model, which BTW is not much lower than where it was before. - Dan
Senior Vice President and Chief Financial Officer, David Honeyfield, commented, “As we manage the capital investment program, we are also adjusting the timing of completions, resulting in full-year estimated production towards the bottom of our 32 to 33 MMBoe range. This production outlook takes into account our updated turn-in-line schedule, anticipated midstream constraints in Wattenberg, and our updated production forecast from our Delaware assets. In terms of capital investment, we are committed to prioritizing the strength of our balance sheet while delivering highly economic rates-of-return on our capital program. After adjusting for the timing of drilling and certain completions and increased well costs in the Delaware, we expect full-year capital to be approximately $800 million. This should set us up to exit 2017 with more than $100 million of cash on the balance sheet together with the undrawn $700 million commitment level on our current bank revolving credit facility."
Senior Vice President and Chief Financial Officer, David Honeyfield, commented, “As we manage the capital investment program, we are also adjusting the timing of completions, resulting in full-year estimated production towards the bottom of our 32 to 33 MMBoe range. This production outlook takes into account our updated turn-in-line schedule, anticipated midstream constraints in Wattenberg, and our updated production forecast from our Delaware assets. In terms of capital investment, we are committed to prioritizing the strength of our balance sheet while delivering highly economic rates-of-return on our capital program. After adjusting for the timing of drilling and certain completions and increased well costs in the Delaware, we expect full-year capital to be approximately $800 million. This should set us up to exit 2017 with more than $100 million of cash on the balance sheet together with the undrawn $700 million commitment level on our current bank revolving credit facility."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: PDC Energy Q2 Results
I have updated my forecast model for PDCE and it will be posted to the EPG website later today.
First let me say that PDC Energy is a financially conservative company that has a track record of "under-promising and over-delivering". Q2 results were much better than my forecast. So, I am basing my forecast/valuation on the low end of their updated production guidance. My bet is that they will exceed it.
"FEAR" has a strong hold on Energy Sector investors, so even a slight disappoint makes investors hit the sell button. PDCE beat my forecast and First Call's forecast for Q2, but they announced a slight reduction in their drilling & completion program this morning. Wall Street over-reacted as it usually does. Wall Street is also not keen on the DJ Basin and that is where most of PDC's production comes from.
Using the low end of the company's guidance, my valuation adjusts down $2.00 to $80.00/share. This compares to First Call's price target of $62.30.
Another "FEAR" that is a cloud hanging over Wall Street is that the Permian Basin is more "gassy" than they modeled. Despite a detailed explanation of why this is happening on the PXD conference call (which you should all listen to) the Wall Street gang has grasp onto this issue.
I do think U.S. oil production growth will slow, because it was being over-reported by EIA and lots of companies are (and s/b) slowing their drilling programs and pushing off completions.
Take a look at the RED BOX on the forecast model and you will see why I think PDCE has a lot of upside for us.
First let me say that PDC Energy is a financially conservative company that has a track record of "under-promising and over-delivering". Q2 results were much better than my forecast. So, I am basing my forecast/valuation on the low end of their updated production guidance. My bet is that they will exceed it.
"FEAR" has a strong hold on Energy Sector investors, so even a slight disappoint makes investors hit the sell button. PDCE beat my forecast and First Call's forecast for Q2, but they announced a slight reduction in their drilling & completion program this morning. Wall Street over-reacted as it usually does. Wall Street is also not keen on the DJ Basin and that is where most of PDC's production comes from.
Using the low end of the company's guidance, my valuation adjusts down $2.00 to $80.00/share. This compares to First Call's price target of $62.30.
Another "FEAR" that is a cloud hanging over Wall Street is that the Permian Basin is more "gassy" than they modeled. Despite a detailed explanation of why this is happening on the PXD conference call (which you should all listen to) the Wall Street gang has grasp onto this issue.
I do think U.S. oil production growth will slow, because it was being over-reported by EIA and lots of companies are (and s/b) slowing their drilling programs and pushing off completions.
Take a look at the RED BOX on the forecast model and you will see why I think PDCE has a lot of upside for us.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: PDC Energy Q2 Results
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group