SilverBow Resources (SBOW) Update - May 26

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SilverBow Resources (SBOW) Update - May 26

Post by dan_s »

Looking at today's selloff of the gassers taking SBOW down too seems like a buying opportunity to me.
First, I will take some blame for labelling SilverBow as a gasser last year. It does have huge upside for ngas in Webb County, but that development is now on hold.
> In Q1 SilverBow got ~57% of its revenues from liquid sales.
> That percentage will keep going up.
> They have moved both of their drilling rigs to oil prone areas.
> Their 2023 guidance is for oil production to double YOY and natural gas production to remain flat.
> A high percentage of their natural gas production for 2023 is hedged at a blended price over $3.50, so current gas prices have very little impact on my valuation anyway.
> SilverBow reported net income per share of $4.18 for Q1 and operating CFPS was $4.14, with full-year operating CFPS forecast to be ~$20.00.
> YOY production growth is on-track for 24.6%, based on the mid-point of their production guidance. < This is an Aggressive Growth company that is able to fund their drilling program with operating cash flow. More than 20% annual production growth likely for several years.

Neal Dingmann's price target is $44 and First Call's average price target is $49.50.

Read our updated profile, which is under the Sweet 16 tab on the EPG website.
Dan Steffens
Energy Prospectus Group
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