PDC Energy (PDCE) Update - July 20

[dan_s]

PDC Energy does not get the coverage that it deserves. Maybe because it is based in Denver and most of its production comes from the "Sweet Spot" in the DJ Basin. Or maybe because the Wall Street Gang does not like companies named after letters; they like "sexy" names like Diamondback Energy or Jagged Peak Energy.

PDC Energy is KICKING ASS and no one seems to notice. If you haven't read our profile on this one then you need to get up to speed.
1. It is not a small company: Q1 2018 production was 98,978 Boepd (63.4% high value liquids) and it has a clear path to 150,000 Boepd by the end of 2019.
2. YOY production growth was 44% in 2017 and I am being conservative in forecasting just 27% YOY growth in 2018.
3. This year's aggressive growth D&C program should be totally funded by cash flow from operations.
4. Best of all, it has a strong balance sheet and only 66 million shares of common stock outstanding. If oil prices and production increase over the next six months (a fairly good bet), this stock should get a lot more attention.

PDCE close on July 20 at $61.06
So far in July, four Wall Street firms have sent updated valuations / price targets to Reuters. Their price targets range from $68 to $87.

No matter how hard I try, I cannot justify a valuation within that range. My valuation remains $90/share and there is definitely upside to that number. Find the RED BOX.