CLR's Price Target Raised
Posted: Sat Sep 20, 2014 1:53 pm
Continental Resources (CLR) took a beating on Thursday (9/18) because they announced an increase in their average completed well costs in the Bakken. IMO the market grossly over-reacted to the wording of the press release, which actually contained some very bullish stuff. It did not help that the press release came out on a day that oil prices were down and the whole energy sector was in red. The real news is that CLR's new (more expensive) Bakken wells with longer laterals and more frac stages are going to produce A LOT MORE OIL. In fact, the ROI on the cost to get another 200,000 to 300,000 bbls of oil per well is off the charts.
They also announced that SCOOP is going to be HUGE, almost as big as what they have in the Bakken.
Here is what is more telling. First Call's price target for CLR has gone up $2.20 to $81.14 this week. This tells me that when analysts sat down and adjusted their models for what was actually said during the Analyst Day presentation, they liked what they heard. I definitely did.
My Fair Value Estimate is now $86.00 and it will go up in a few months when I roll my forecast model forward a year.
IMO when the market over-reacts like this, it is a great buying opportunity for us. I added to my position in CLR on Friday.
CLR is one of the greatest growth stocks EVER. They have 25% to 30% production and proven reserve growth locked in for many years. This should be a Core Holding in any energy sector portfolio.
They also announced that SCOOP is going to be HUGE, almost as big as what they have in the Bakken.
Here is what is more telling. First Call's price target for CLR has gone up $2.20 to $81.14 this week. This tells me that when analysts sat down and adjusted their models for what was actually said during the Analyst Day presentation, they liked what they heard. I definitely did.
My Fair Value Estimate is now $86.00 and it will go up in a few months when I roll my forecast model forward a year.
IMO when the market over-reacts like this, it is a great buying opportunity for us. I added to my position in CLR on Friday.
CLR is one of the greatest growth stocks EVER. They have 25% to 30% production and proven reserve growth locked in for many years. This should be a Core Holding in any energy sector portfolio.