Energy Prospectus

ROSE underperformed most of our Sweet 16 Growth Portfolio companies last year, but I think it could be a Big Winner for us this year. Production increased by more than 33% YOY in 2013, but the market didn't seem to appreciate that little fact. Mr. Market may not have liked the Permian Basin acquisition they made from Comstock Resources (CRK) in 2013, but I sure did. It gives ROSE a second core area of growth.

I am expecting ROSE to increase production by AT LEAST 25% this year. The company is also going to get a significant revenue boost from increasing natural gas and NGL prices.

Production mix expected for 2014:
Crude oil: 18,750 bbls per day
NGLs: 22,750 bbls per day
Natural gas: 126,000 mcf per day

More reasons to like ROSE in article below.

http://seekingalpha.com/article/1970461 ... urce=yahoo

Rosetta Resources (ROSE): An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 Tab.

ROSE will be one of our Sweet 16 companies that will benefit the most from increasing NGL prices. My Fair Value Estimate has been increased $2/share to $76/share. First Call's price target is $59.04.

My EPS forecast is near the top of the First Call range of estimates for 2014, but there is at least one analyst that has an even higher estimate.

Note that I am still using $3.50/mcf for natural gas in all of my 2014 forecast models. If the gas prices hold anywhere near the current price, my valuation for ROSE will go much higher. ROSE should produce close to 126,000 mcfpd of Ngas in 2014 and 22,750 bbls per day of NGLs. 30,000 mcfpd is hedges with a SWAP at $4.07/mcf. They have 50,000 mcfpd covered by a collar with a $4.94/mcf ceiling.