Sweet 16 Update - March 9

[dan_s]

The main Sweet 16 spreadsheet will be posted to the EPG website on Saturday morning.

The Sweet 16 dropped almost 10% during the week ending March 8, but nothing has really changed. It is now up just 2.84% after being up 12.68% on March 2nd.
> WTI crude oil price is stuck in the $55 to $58 range, which is above what I am using in my forecast/valuation models.
> The annual spike in demand for oil is just weeks away.
> Natural gas price is also hanging tough with the April NYMEX contract closing at $2.86/MMBtu and the strip is higher than what I'm using in the forecasts.

SWN and PDCE are the unlikely leaders of the pack, both up about 25% YTD. CDEV is down 21% YTD for no justifiable reason. First Call's target price actually went higher for several Sweet 16 companies last week.

I have added a new column to Tab 2 of the Sweet 16 Excel spreadsheet with shows PV10 value of proven reserves (P1) for each company as of 12-31-2018.
An upstream company should never trade below this formula: (Current Assets + PV10 of P1 reserves - Total Debt) / # of common shares outstanding.
For RRC that number is $24/share and the stock closed at $9.79 on Friday.

Unless you believe AOC's "Green New Deal" is going to work, this world is going to need a steady increase in all the great stuff made out of oil, gas and NGLs.

We are still working on updated profiles for CRZO, CXO and EOG. All 16 should be updated by Monday morning on the website.

I will be working all weekend because Susan & I are heading down to Mexico on Monday for five days. I like the trips, but the workload before and after each vacation is tough.

Weekly podcast will be on the website Saturday afternoon.

Next Hess Club luncheon is March 20th.