Penn Virginia (PVAC) Update - June 13
Posted: Sun Jun 13, 2021 1:05 pm
I have updated my forecast/valuation model for PVAC and posted it to the EPG website. My valuation increases by $5.50 to $35.00 per share.
PVAC closed at $24.50 on June 11.
PVAC is up more than 125% YTD and it still has a lot of upside for us, with over 500 low-risk development drilling locations.
> Even with 60% of their oil hedged with collars that have ceilings in the mid-$50s they are on track to generate close to $7.00/share of operating cash flow.
> They generated free cash flow from operations for five straight quarters Q1 2020 thru Q1 2021 and that trend will continue.
> None of their natural gas or NGLs are hedged, which will give 2H 2021 revenues a big boost.
All of our Small-Caps have lots of upside because they are still trading at very low multiples of operating cash flow. "Multiple Expansion" should be a primary driver for the upstream oil & gas sector as the market gains more confidence in higher commodity prices.
PVAC closed at $24.50 on June 11.
PVAC is up more than 125% YTD and it still has a lot of upside for us, with over 500 low-risk development drilling locations.
> Even with 60% of their oil hedged with collars that have ceilings in the mid-$50s they are on track to generate close to $7.00/share of operating cash flow.
> They generated free cash flow from operations for five straight quarters Q1 2020 thru Q1 2021 and that trend will continue.
> None of their natural gas or NGLs are hedged, which will give 2H 2021 revenues a big boost.
All of our Small-Caps have lots of upside because they are still trading at very low multiples of operating cash flow. "Multiple Expansion" should be a primary driver for the upstream oil & gas sector as the market gains more confidence in higher commodity prices.