PDC Energy (PDCE, $23.92), an oil-and-gas exploration-and-production company, is a major player in the Wattenberg Field in Colorado and the Delaware Basin in West Texas. And it's only getting bigger.
Having completed its $1.7 billion merger with SRC Energy, PDCE is now the second-largest producer in Colorado's DJ Basin and offers "one of the most compelling combinations of free cash flow yield and capital efficient growth," according to Stifel analysts, who rate shares a Buy.
Stifel adds that "high asset quality, a strong growth profile and a top tier balance sheet" make PDC an irresistible buy among small-cap energy stocks. Stifel's price target is $52.00
PDCE shares are trailing the S&P 500 by almost 55 percentage points over the past 52 weeks, getting the worst of what has been a bad year for energy stocks as a group. However, the bull case prevails among analysts who believe the SRC Energy merger will be pivotal. Of the 19 analysts covering the stock surveyed by S&P Global Market Intelligence, 12 rate it at Strong Buy, four say Buy and three call it a Hold.
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My Pro Forma forecast/valuation model can be found under the Sweet 16 tab on the EPG website.
PDC Energy (PDCE) - Update Jan 19
PDC Energy (PDCE) - Update Jan 19
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: PDC Energy (PDCE) - Update Jan 19
DENVER, Jan. 14, 2020 (GLOBE NEWSWIRE) -- PDC Energy, Inc. (PDCE) (“PDC”) today announced that it has completed its acquisition of SRC Energy Inc. (SRCI) (“SRC”). The merger was previously approved by PDC stockholders and SRC shareholders at special meetings held on January 13, 2020.
Each eligible share of SRC common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive 0.158 shares of PDC’s common stock, with cash paid in lieu of any fractional shares. As a result of the merger, SRC common stock will no longer be listed for trading on the NYSE American, and SRC will no longer have reporting obligations under the Securities Exchange Act of 1934.
Bart Brookman, President and Chief Executive Officer of PDC stated “Today is a pivotal day for PDC as we have completed the merger of these two companies, both of which are grounded in strong core values and a shared commitment to responsible and safe operations. This merger will give the combined company incredible financial strength and flexibility, highlighted by low leverage and an industry-leading cost structure, as well as a business plan capable of delivering sustainable free cash flow to return significant capital to shareholders.”
About PDC Energy, Inc.
PDC Energy, Inc. is a domestic independent exploration and production company that acquires, produces, develops, and explores for crude oil, natural gas, and NGLs, with operations in the Wattenberg Field in Colorado and in the Delaware Basin in West Texas. Its operations are focused on the liquid-rich horizontal Niobrara and Codell plays in the Wattenberg Field and the liquid-rich Wolfcamp zones in the Delaware Basin.
Each eligible share of SRC common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive 0.158 shares of PDC’s common stock, with cash paid in lieu of any fractional shares. As a result of the merger, SRC common stock will no longer be listed for trading on the NYSE American, and SRC will no longer have reporting obligations under the Securities Exchange Act of 1934.
Bart Brookman, President and Chief Executive Officer of PDC stated “Today is a pivotal day for PDC as we have completed the merger of these two companies, both of which are grounded in strong core values and a shared commitment to responsible and safe operations. This merger will give the combined company incredible financial strength and flexibility, highlighted by low leverage and an industry-leading cost structure, as well as a business plan capable of delivering sustainable free cash flow to return significant capital to shareholders.”
About PDC Energy, Inc.
PDC Energy, Inc. is a domestic independent exploration and production company that acquires, produces, develops, and explores for crude oil, natural gas, and NGLs, with operations in the Wattenberg Field in Colorado and in the Delaware Basin in West Texas. Its operations are focused on the liquid-rich horizontal Niobrara and Codell plays in the Wattenberg Field and the liquid-rich Wolfcamp zones in the Delaware Basin.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group