Energy Prospectus

Tudor Pickering & Co Adjusts Price Target for Continental Resources to $74 From $60, Maintains Hold Rating
BY MT Newswires
— 10:43 AM ET

This one say overweight for a ride from 61 to 63

KeyBanc Adjusts Continental Resources' Price Target to $63 from $61, Keeps Overweight Rating

Most of the analysts have their hands tied because they must use their company's oil & gas price decks to value companies. If oil stays over $100/bbl, my valuation will go over $80 per share.

Oil prices need to settle within a range for us to know how to value it. That may take awhile.

Dan, your current price target is $75. If oil remains over $100 and given that CLR has no hedges, a target price increase to $80 seems way too low.

The problem is that I don't know how long oil will stay over $100/bbl.

Using the new Raymond James oil price forecast of:
2022
Q1: $90
Q2: $100
Q3: $110
Q4: $100
2023: $90
2024: $80

My valuation of CLR goes to $86/share. If you believe WTI will stay over $110 for 3 years, my valuation goes over $100/share.

As I mention in the newsletter (Final Thoughts), if the Big Paradigm Shift takes root and the Wall Street Gang's new assumption is that demand for oil-based productions will remain high for several more decades we will see "Multiple Expansion". That is when the Sweet 16 stock prices could increase by several 100%.

For example, if CLR's realized oil price is $110/bbl in 2023, the company will generate close to $8 billion in operating cash flow ($23/share), with free cash flow over $5 billion. 8X to 10X operating cash flow per share would be a reasonable price target.
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The only reason that I keep using a multiple of 5X annualized operating cash flow per share to value CLR is because it still has a lot over debt; $10.7 billion. The debt load is reasonable for a company of their size, but still a big number.

Good discussion.

With oil at 130, they are printing money. Q1 results will be awesome and I'm hoping the name reprices.

Analysts were questioning Hamm/company strategy when they bought the Delaware basin assets for 3.1 b when oil was $ 67.

He looks like a genius now and the analysts haven't raised their 60 dollar numbers

Kathie Wood of ARKK infamy predicted oil would go to $ 10 last July and we know what the IEA said

I don't believe any of the climate change crap or the transition to renewables and I think high prices are here to stay.
That's why I'm wildly bullish. I could be wrong

I'm not going to bet against Hamm of CLR or Warren Buffet with OXY ( another unhedged name)