Energy Prospectus

There is a very negative article on SN on Seeking Alpha this morning. I would like your take on it. Thx.

Sanchez Energy: Company's Prospects In The Face Of Lower Oil Prices

Oct. 9, 2014 4:00 PM ET | 7 comments | About: Sanchez Energy Corporation (SN)

Summary
•In the face of a seemingly sustained period of lower oil prices, shale producers seem to be particularly vulnerable, as they are already having difficulties matching costs with revenues.
•There is a danger of a shale-related bond exodus occurring as realization sets in that operations will continue to be financed through debt for a long time to come.
•Sanchez Energy will likely manage to at the very least cover drilling costs through revenue next year, but the Catarina project acquired from Shell will act as a drag.

complete article-----
http://seekingalpha.com/article/2551835 ... ices?ifp=0

I'm sure Dan would agree with the comments being posted to Zoltan's article, but I'll be curious as well. The wildcard, of course, is the stabilized oil prices for The Eagle Ford and Permian producers. I bought SN at $23. Oops!

We need to see where oil prices stabilize. It appears there are some oil traders coming back today, but it may be the shorts covering for the weekend.

An updated forecast model for SN is now available under the Sweet 16 tab. Just click on the SN logo. My revised FVE is $43.25, compared to First Calls price target today of $41.63.

In addition to lowering the oil price to $85, I lowered oil production by 1,000 bbls per day in 2015.

I doubt that SN will have trouble funding their growth unless oil prices go a lot lower. A lot will depend on their year-end reserve report, which is what banks use to decide on credit limits.

Again, we need to see where oil prices stabilize before we can make an judgements like the SA article made.