Energy Prospectus

Range Resources (RRC) price target lowered to $28 from $32 at RBC Capital on 1-25-2018.

My valuation goes from $33.00 to $27.80 because of lower production guidance. I could justify using a higher multiple to value RRC because their free cash flow this year (thanks to the lower capital expenditure program) will strengthen the balance sheet.

My updated forecast/valuation model will be posted to the EPG website late today.

The "gassers" are out of favor with the Wall Street Gang, but a very cold back half of February can redirect the "herd" quickly.

The big increase in proven reserves that Range announced yesterday will lower their Units-of-Production DD&A rate, so reported earnings in Q4 2017 and all future periods will likely be much higher than what I am showing in my forecast model. My valuations are based on a multiple of operating cash flow, so DD&A expense (a non-cash expense) and reported earnings (a GAAP thing) have no impact on my valuation of a company's stock.

This and lots of stuff that I post here is in response to a private email that I get from members.

Please do not be afraid to post here because it is likely that other members have the same questions.

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Anyone contemplating investing in RRC should first read this Seeking Alpha piece out today (1/26) so that you will have the benefit of another opinion regarding what you would be getting into. https://seekingalpha.com/article/414047 ... 9&uprof=44

The author takes a very detailed look at the company and demonstrates why management's incompetence and apparent dishonesty (which hedge funds recognized and profited from) has destroyed shareholder value. He argues it is time for an activist (names Paul Singer at Elliott Management) to gain control, fire management and set the company on a positive course.

Just take all Seeking Alpha articles with a "grain of salt". They pay per click, so the authors use outrageous headlines and claims to get more clicks.

I do agree that an aggressive activist could make $billions breaking and selling RRC. It holds some of the most valuable real estate on this planet.

I don't know why you have stuck with this one when there is obviously a problem. The chart tells me all I need to know. Do you have a position in RRC?

Take a hard look at my forecast/valuation model for RRC and tell me what is wrong with it.

RRC has been in our Sweet 16 for over twelve years. It is a fantastic growth company that has generated double digit annual production growth for many years and it has many more years of low-risk development drilling inventory. The company holds over a million acres of leasehold (most is HBP) in the most valuable natural gas & NGL resource play on the planet. That is why it stays in the Sweet 16.

I list all of my personal stock holdings in the newsletter, but I NEVER promote a stock just because I own it. I have NEVER been compensated by RRC for anything.

AS I HAVE POSTED HERE MANY TIMES: Natural gas is out of favor on Wall Street today, but that can change quickly. AR, GPOR and RRC are all profitable "gassers" with strong production growth locked in. If you don't like RRC or any company discussed here then you should sell it.

All EPG members are 100% responsible for what they invest in.