SFY
Posted: Wed Mar 07, 2012 1:54 pm
Swift Energy (SFY): An updated Net Income and Cash Flow Forecast model has been posted under the Watch List Tab. We have increased our Fair Value estimate based on the company's production guidance.
Take a hard look at SFY. The stock is trading near $30 and my Fair Value estimate is $54.
> The market still thinks it is a gasser when in fact their 2012 revenues will be 85% from liquids sales
> This year's capital program is focused on increasing liquids
> PV10 value of proven reserves is $1.9 Billion compared to market cap of $1.2 Billion
I believe my forecast may prove to be quite conservative. They sell a lot of oil into the Gulf Coast markets at premium prices and only 20% of oil is hedged at $100.50. These are financial hedges based on WTI, so they get the Gulf Coast premium on all of their oil, even the hedged volumes. [Note that their realized oil price was $111.79/bbl in Q4 and I'm only using $105/bbl in my forecast.]
Take a hard look at SFY. The stock is trading near $30 and my Fair Value estimate is $54.
> The market still thinks it is a gasser when in fact their 2012 revenues will be 85% from liquids sales
> This year's capital program is focused on increasing liquids
> PV10 value of proven reserves is $1.9 Billion compared to market cap of $1.2 Billion
I believe my forecast may prove to be quite conservative. They sell a lot of oil into the Gulf Coast markets at premium prices and only 20% of oil is hedged at $100.50. These are financial hedges based on WTI, so they get the Gulf Coast premium on all of their oil, even the hedged volumes. [Note that their realized oil price was $111.79/bbl in Q4 and I'm only using $105/bbl in my forecast.]