Sweet 16 Update - Nov 2

[dan_s]

An updated Sweet 16 spreadsheet has been posted under the Sweet 16 Tab. The spreadsheet shows my Fair Value Estimate compared to First Call's Price Target for each company.

Five of the companies (EXXI, KOG, RRC, SM and WLL) have reported Q3 results. I have updated the individual forecast models and my Fair Value Estimate for each company. Energy XXI's valuation went down a couple bucks to $50/share and the other four went up quite a bit. Based on what KOG, SM and WLL reported, I now expect all of our Bakken company valuations to go way up.

Increased well density and the new Plug-N-Perf completion technology should significantly increase recoverable reserves in the Williston Basin (Bakken and Three Forks). It looks like 12-16 horizontal wells will be needed per 1280 acres to fully develop the Bakken and Three Forks. The big jump will come for these companies when they report significantly higher proven reserves in their 3rd party year-end reserves reports.

I was most impressed by SM Energy's Q3 and apparently so were other analysts. First Call's price target went up $9/share last week to $99.38. My Fair Value Estimate is $135/share. I added SM to the Sweet 16 on 7/1/2012 at $49.11/share. This is why you pay me the Big Bucks!

I will be sending out an updated profile on Kodiak this weekend. Check your e-mail on Sunday.

The rest of the Sweet 16 report Q3 results next week. I will update my forecast models ASAP and post comments here. GPOR reports on Monday. That should be interesting.

Keep and eye on SFY and TPLM from our Small-Cap Growth Portfolio.