Sweet 16 Update - November 1
Posted: Fri Oct 31, 2014 5:42 pm
Sweet 16 Growth Portfolio spreadsheet has been updated and posted under the Sweet 16 Tab:
> Tab 1 of the spreadsheet is a summary of the EPS and CFPS forecasts,
> Tab 2 shows my Fair Value Estimate compared to First Call's Price Target for each company as of 10-31-2014
Four of the companies reported 3rd quarter results this week (NFX, RRC, SM and WLL). They all reported results that were near my forecast.
Newfield Exploration (NFX) had the most impressive quarter. It has HUGE upside in Oklahoma. They should announce the sale of their China assets this quarter and I believe the sales price will turn a few heads on Wall Street. My SWAG is that the winning bid is near $1.5 Billion.
Whiting Petroleum (WLL) had a strong quarter, but Wall Street seems very worried about the Bakken companies. Plus, the merger with KOG throws some uncertainty into the mix. The merger should close by year-end and the combined proven reserves are going to be very impressive.
SM Energy (SM) reported strong earnings and cash flow, but their production came in below guidance due to weather and 3rd party midstream issues. Production is expected to be 12,000 boepd higher in Q4. SM is trading at less than 3X CFPS, which is ridiculous to me. Based on my forecast, SM should generate over $22 CFPS in 2015 even if oil & gas prices stay right were they closed today. SM does product a lot of natural gas, but they have a bunch of it hedged at over $4.00/mcf. A weather related spike in gas prices might draw some attention.
Range Resources (RRC) is a rock solid company with HUGE reserves. If your time horizon is more than a few months, RRC should be in your portfolio. They have 20% to 25% production growth locked in for AT LEAST five years.
The rest of the Sweet 16 report 3rd quarter results next week. I will be updating all of the forecast models for our portfolio companies as quickly as I can after they release results. Remember that "Reported Earnings" will include very large mark-to-market adjustments on hedges this quarter. Focus on cash flows and operations updates.
I urge all of you to get up to speed on the SCOOP and STACK plays in Oklahoma. These are going to be the big stories for CLR, NFX, XEC, UNT, DVN and GST. Read our updated profile on NFX first, then check out the CLR website.
> Tab 1 of the spreadsheet is a summary of the EPS and CFPS forecasts,
> Tab 2 shows my Fair Value Estimate compared to First Call's Price Target for each company as of 10-31-2014
Four of the companies reported 3rd quarter results this week (NFX, RRC, SM and WLL). They all reported results that were near my forecast.
Newfield Exploration (NFX) had the most impressive quarter. It has HUGE upside in Oklahoma. They should announce the sale of their China assets this quarter and I believe the sales price will turn a few heads on Wall Street. My SWAG is that the winning bid is near $1.5 Billion.
Whiting Petroleum (WLL) had a strong quarter, but Wall Street seems very worried about the Bakken companies. Plus, the merger with KOG throws some uncertainty into the mix. The merger should close by year-end and the combined proven reserves are going to be very impressive.
SM Energy (SM) reported strong earnings and cash flow, but their production came in below guidance due to weather and 3rd party midstream issues. Production is expected to be 12,000 boepd higher in Q4. SM is trading at less than 3X CFPS, which is ridiculous to me. Based on my forecast, SM should generate over $22 CFPS in 2015 even if oil & gas prices stay right were they closed today. SM does product a lot of natural gas, but they have a bunch of it hedged at over $4.00/mcf. A weather related spike in gas prices might draw some attention.
Range Resources (RRC) is a rock solid company with HUGE reserves. If your time horizon is more than a few months, RRC should be in your portfolio. They have 20% to 25% production growth locked in for AT LEAST five years.
The rest of the Sweet 16 report 3rd quarter results next week. I will be updating all of the forecast models for our portfolio companies as quickly as I can after they release results. Remember that "Reported Earnings" will include very large mark-to-market adjustments on hedges this quarter. Focus on cash flows and operations updates.
I urge all of you to get up to speed on the SCOOP and STACK plays in Oklahoma. These are going to be the big stories for CLR, NFX, XEC, UNT, DVN and GST. Read our updated profile on NFX first, then check out the CLR website.