Sweet 16 Update - August 3
Posted: Fri Aug 02, 2013 5:53 pm
I updated the Sweet 16 Growth Portfolio spreadsheet and posted it under the Sweet 16 Tab. I did it a day early because I am speaking at the Houston Rebels Investment Club meeting tomorrow morning at 9:30. I will be discussing my thoughts on several of our portfolio companies. About half the Rebels are EPG members.
Five of the Sweet 16 have reported 2nd quarter results so far. The rest will report next week. Here are the grades so far.
> SM Energy (SM): A+ = due to a significant increase in their production forecast and strong results in the Eagle Ford and Bakken. I have increased my Fair Value Estimate to $110.73/share and it will go higher if they keep beating their production guidance. If you do not own SM, I highly recommend you read our profile on this one. Note that my forecast model does not include any production from their Eaglebine Project in East Texas. They are "tight' on this play as they are continue to add acreage. I believe it could become another core area for them in 2014.
> Whiting (WLL): A = beat my forecast across the board. This is a grossly undervalued mid-cap. Read our profile
> Helmerich & Payne (HP): B = HP is still the #1 onshore driller in the world, but low Ngas prices keep rig rates under pressure.
> Range Resources (RRC): A = Strong production growth and RRC holds a huge stake in North America's #1 gas resource play. They now hold over 83 TCFE of reserves in the Marcellus, Utica and Devonian shales in the Northeast.
> Kodiak (KOG): B- = Production came in below my forecast. Share price should hold up because big jump in production is coming in the 3rd quarter and all of the Bakken producers are getting a HUGE boost from the run up in WTI oil prices. Production should be well above 30,000 boepd by September 30.
Next week, keep an eye on the news coming out of the Permian Basin from CXO, EOG, XEC and ROSE. I'm hearing that horizontal wells are coming in big.
Gulfport (GPOR) should get a lot of attention from their Q2 results. The stock has run up in anticipation, so you may want to take some profits since we may see some "sell the news" no matter how good the results are.
Energy XXI (EXXI), Rosetta Resources (ROSE) and Unit Corp. (UNT) all have some catching up to do. I am hoping for good reports from all three. EXXI is on a FYE of June 30, so they will report year-end reserves. Their successful horizontal development wells and much higher Ngas prices on June 30 than a year ago should result in a big reserve addition.
Five of the Sweet 16 have reported 2nd quarter results so far. The rest will report next week. Here are the grades so far.
> SM Energy (SM): A+ = due to a significant increase in their production forecast and strong results in the Eagle Ford and Bakken. I have increased my Fair Value Estimate to $110.73/share and it will go higher if they keep beating their production guidance. If you do not own SM, I highly recommend you read our profile on this one. Note that my forecast model does not include any production from their Eaglebine Project in East Texas. They are "tight' on this play as they are continue to add acreage. I believe it could become another core area for them in 2014.
> Whiting (WLL): A = beat my forecast across the board. This is a grossly undervalued mid-cap. Read our profile
> Helmerich & Payne (HP): B = HP is still the #1 onshore driller in the world, but low Ngas prices keep rig rates under pressure.
> Range Resources (RRC): A = Strong production growth and RRC holds a huge stake in North America's #1 gas resource play. They now hold over 83 TCFE of reserves in the Marcellus, Utica and Devonian shales in the Northeast.
> Kodiak (KOG): B- = Production came in below my forecast. Share price should hold up because big jump in production is coming in the 3rd quarter and all of the Bakken producers are getting a HUGE boost from the run up in WTI oil prices. Production should be well above 30,000 boepd by September 30.
Next week, keep an eye on the news coming out of the Permian Basin from CXO, EOG, XEC and ROSE. I'm hearing that horizontal wells are coming in big.
Gulfport (GPOR) should get a lot of attention from their Q2 results. The stock has run up in anticipation, so you may want to take some profits since we may see some "sell the news" no matter how good the results are.
Energy XXI (EXXI), Rosetta Resources (ROSE) and Unit Corp. (UNT) all have some catching up to do. I am hoping for good reports from all three. EXXI is on a FYE of June 30, so they will report year-end reserves. Their successful horizontal development wells and much higher Ngas prices on June 30 than a year ago should result in a big reserve addition.