SilverBow Resources (SBOW) Good News - June 23
Posted: Thu Jun 23, 2022 9:06 am
Larger and improved credit facility is good news. It also confirms that the bankers have taken a hard look at the Sandpoint Acquisition and they like it.
My valuation of SBOW is $91.00. The recent dip in natural gas prices will not impact the valuation much since a high percentage (63% to 70%) of their 2022 gas production is hedged. The Sundance Acquisition closed on May 11 and the Sandpoint Acquisition should close early in Q3. Q4 production s/b ~53,000 Boepd, 66% natural gas, 11% NGLs and 23% crude oil. Looking at my model this morning, higher realized NGL prices should offset most of the dip in natural gas prices for the remainder of 2022. FWIW First Call's price target is $73.50.
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HOUSTON, June 23, 2022--(BUSINESS WIRE)--SilverBow Resources, Inc. (NYSE: SBOW) ("SilverBow" or "the Company") today announced it has received bank approval to amend its senior secured revolving credit facility ("Credit Facility") to extend the maturity of the Credit Facility to October 2026, increase the borrowing base from $525 million to $775 million, and reduce the interest rate margin for amounts outstanding, amongst other things, in connection with SilverBow’s two recent strategic acquisitions including the oil and gas assets of SandPoint Operating, LLC, a subsidiary of SandPoint Resources, LLC in May 2022 (collectively, "SandPoint") and Sundance, as defined below. The amended Credit Facility and borrowing base increase will go into effect with the closing the Company’s previously announced acquisition of substantially all of the oil and gas assets from Sundance Energy, Inc. and certain affiliated entities, (collectively, "Sundance").
MANAGEMENT COMMENTS
Sean Woolverton, SilverBow’s Chief Executive Officer, commented, "Today’s announcement is a testament to the quality and breadth of our asset base. SilverBow’s legacy assets coupled with the acquisitions we have closed over the past year and expect to close soon have transformed the Company into a premier South Texas operator with increasing scale. I would like to thank our bank syndicate for their support. Their confidence in SilverBow is displayed with the step up of approximately 50% in our borrowing base as well as the extension of the tenor of our Credit Facility. With a meaningful free cash flow profile, substantial liquidity, and a deep inventory of drilling locations, SilverBow is well positioned to effectuate our growth strategy through both the drill bit and accretive acquisitions."
ABOUT SILVERBOW RESOURCES, INC.
SilverBow Resources, Inc. (NYSE: SBOW) is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas in the Eagle Ford Shale and Austin Chalk in South Texas. With over 30 years of history operating in South Texas, the Company possesses a significant understanding of regional reservoirs which it leverages to assemble high quality drilling inventory while continuously enhancing its operations to maximize returns on capital invested. For more information, please visit www.sbow.com. Information on the Company’s website is not part of this release.
My valuation of SBOW is $91.00. The recent dip in natural gas prices will not impact the valuation much since a high percentage (63% to 70%) of their 2022 gas production is hedged. The Sundance Acquisition closed on May 11 and the Sandpoint Acquisition should close early in Q3. Q4 production s/b ~53,000 Boepd, 66% natural gas, 11% NGLs and 23% crude oil. Looking at my model this morning, higher realized NGL prices should offset most of the dip in natural gas prices for the remainder of 2022. FWIW First Call's price target is $73.50.
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HOUSTON, June 23, 2022--(BUSINESS WIRE)--SilverBow Resources, Inc. (NYSE: SBOW) ("SilverBow" or "the Company") today announced it has received bank approval to amend its senior secured revolving credit facility ("Credit Facility") to extend the maturity of the Credit Facility to October 2026, increase the borrowing base from $525 million to $775 million, and reduce the interest rate margin for amounts outstanding, amongst other things, in connection with SilverBow’s two recent strategic acquisitions including the oil and gas assets of SandPoint Operating, LLC, a subsidiary of SandPoint Resources, LLC in May 2022 (collectively, "SandPoint") and Sundance, as defined below. The amended Credit Facility and borrowing base increase will go into effect with the closing the Company’s previously announced acquisition of substantially all of the oil and gas assets from Sundance Energy, Inc. and certain affiliated entities, (collectively, "Sundance").
MANAGEMENT COMMENTS
Sean Woolverton, SilverBow’s Chief Executive Officer, commented, "Today’s announcement is a testament to the quality and breadth of our asset base. SilverBow’s legacy assets coupled with the acquisitions we have closed over the past year and expect to close soon have transformed the Company into a premier South Texas operator with increasing scale. I would like to thank our bank syndicate for their support. Their confidence in SilverBow is displayed with the step up of approximately 50% in our borrowing base as well as the extension of the tenor of our Credit Facility. With a meaningful free cash flow profile, substantial liquidity, and a deep inventory of drilling locations, SilverBow is well positioned to effectuate our growth strategy through both the drill bit and accretive acquisitions."
ABOUT SILVERBOW RESOURCES, INC.
SilverBow Resources, Inc. (NYSE: SBOW) is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas in the Eagle Ford Shale and Austin Chalk in South Texas. With over 30 years of history operating in South Texas, the Company possesses a significant understanding of regional reservoirs which it leverages to assemble high quality drilling inventory while continuously enhancing its operations to maximize returns on capital invested. For more information, please visit www.sbow.com. Information on the Company’s website is not part of this release.