KOG - Updated Forecast Oct. 31
Posted: Thu Oct 31, 2013 5:40 pm
An updated Net Income & Cash Flow Forecast is now available under the Sweet 16 Tab.
My Fair Value Estimate has been increased to $16.75/share. First Call's Price Target is $14.35, but I expect that to go up after the firms that provide estimates to First Call have time to update their models.
I have been tracking KOG for a long time (over five years). This is the most impressive quarter they have ever reported. It is the first time their production volumes topped my forecast. 4th quarter production is expected to be approximately 39,000 boepd. Their exit rate should be around 41,000 boepd.
KOG's realized oil price was $98.16/bbl in Q3. My 2014 forecast uses $85.00/bbl. With the hedges they have in place, there is little risk of their realized crude oil prices falling below $85. Their realized natural gas price of $6.32/mcf includes NGL sales, so don't get too excited by that.
My EPS forecast for 2014 is $0.84, which is lower than what First Call has right now ($1.05).
My CFPS forecast for 2014 is $3.22 (First Call shows $3.30 CFPS for 2014). So, the current share price is only 4X next year's CFPS. That is a low multiple for a company with this much running room.
My forecast can go higher:
> KOG's Lease Operating Expenses per boe should be going down as they get more SWD wells in place.
> The DD&A rate should go down with a big year-end increase in proven reserves.
> My forecast assumes production of 46,000 boepd (87% crude oil) for 2014.
Based on the expected exit rate, that could be too low.
This little puppy is a Big Dog now. 35,000 boepd is real money!
My Fair Value Estimate has been increased to $16.75/share. First Call's Price Target is $14.35, but I expect that to go up after the firms that provide estimates to First Call have time to update their models.
I have been tracking KOG for a long time (over five years). This is the most impressive quarter they have ever reported. It is the first time their production volumes topped my forecast. 4th quarter production is expected to be approximately 39,000 boepd. Their exit rate should be around 41,000 boepd.
KOG's realized oil price was $98.16/bbl in Q3. My 2014 forecast uses $85.00/bbl. With the hedges they have in place, there is little risk of their realized crude oil prices falling below $85. Their realized natural gas price of $6.32/mcf includes NGL sales, so don't get too excited by that.
My EPS forecast for 2014 is $0.84, which is lower than what First Call has right now ($1.05).
My CFPS forecast for 2014 is $3.22 (First Call shows $3.30 CFPS for 2014). So, the current share price is only 4X next year's CFPS. That is a low multiple for a company with this much running room.
My forecast can go higher:
> KOG's Lease Operating Expenses per boe should be going down as they get more SWD wells in place.
> The DD&A rate should go down with a big year-end increase in proven reserves.
> My forecast assumes production of 46,000 boepd (87% crude oil) for 2014.
Based on the expected exit rate, that could be too low.
This little puppy is a Big Dog now. 35,000 boepd is real money!