Ranger Oil (ROCC) replacing CLR - Oct 18
Posted: Tue Oct 18, 2022 2:11 pm
Ranger Oil Corp. (ROCC) will be replacing Continental Resources (CLR) in the Sweet 16 Growth Portfolio.
As posted here yesterday, CLR's board has accepted Harold Hamm's offer of $74.28 per share, taking the company private.
At $74.28, CLR has gained ~66% YTD and ~356% since 1/1/2021. Nice gains, but it is now time to harvest the gains and move on.
Ranger Oil was created by the merger of Lonestar Resources into Penn Virginia on 10-5-2021. Since I had been following both companies for many years, I have a high level of confidence in my forecast valuation model for ROCC.
My current valuation is $80.00 per share and I believe this stock has significant long-term upside for us if actual results match my forecasts for the next six quarters.
> The Company has provided detailed guidance for 2H 2022, putting them on a path to a 2022 exit rate of 46,000 Boepd; up from 38,479 Boepd in Q2 2022.
> Production mix is approximately 73.5% crude oil, 13.0% natural gas and 13.5% NGLs.
> Ranger is an Eagle Ford company with a lot of running room.
> Eagle Ford oil sells at a premium to WTI and they have plenty of pipeline access for their natural gas.
> It is now funding all growth with operating cash flow and it is generating enough free cash flow to pay a dividend and fund a stock repurchase program.
> The balance sheet is in good shape with no near-term debt problems.
> My guess is that their 12-31-2022 3rd party reserve report will show PV10 Net Asset value of just P1 reserves that is higher than $80/share.
> In addition to an active and successful drilling program, Ranger is also making accretive acquisitions.
Ranger "checks all of the boxes" for promotion to the EPG Sweet 16.
As posted here yesterday, CLR's board has accepted Harold Hamm's offer of $74.28 per share, taking the company private.
At $74.28, CLR has gained ~66% YTD and ~356% since 1/1/2021. Nice gains, but it is now time to harvest the gains and move on.
Ranger Oil was created by the merger of Lonestar Resources into Penn Virginia on 10-5-2021. Since I had been following both companies for many years, I have a high level of confidence in my forecast valuation model for ROCC.
My current valuation is $80.00 per share and I believe this stock has significant long-term upside for us if actual results match my forecasts for the next six quarters.
> The Company has provided detailed guidance for 2H 2022, putting them on a path to a 2022 exit rate of 46,000 Boepd; up from 38,479 Boepd in Q2 2022.
> Production mix is approximately 73.5% crude oil, 13.0% natural gas and 13.5% NGLs.
> Ranger is an Eagle Ford company with a lot of running room.
> Eagle Ford oil sells at a premium to WTI and they have plenty of pipeline access for their natural gas.
> It is now funding all growth with operating cash flow and it is generating enough free cash flow to pay a dividend and fund a stock repurchase program.
> The balance sheet is in good shape with no near-term debt problems.
> My guess is that their 12-31-2022 3rd party reserve report will show PV10 Net Asset value of just P1 reserves that is higher than $80/share.
> In addition to an active and successful drilling program, Ranger is also making accretive acquisitions.
Ranger "checks all of the boxes" for promotion to the EPG Sweet 16.