An updated forecast model for CXO has been posted to the website. Click on the Sweet 16 tab, then the CXO logo. Remember to log in first. All reports and forecast models on the website are only available to EPG members.
CXO had an outstanding 1st quarter. Adjusted EPS and production beat my forecast. They raised production guidance and lowered capital spending. Lease operating expenses and interest expense are also coming down. My Fair Value Estimate has increased by $16.80/share to $141.20/share. This compares to First Call's Price Target of $134.59.
> They have ~65% of this year's oil production hedged at a waited average of $78.82/bbl.
> Cash flow from operations will cover most of this year's capital expenditure budget.
> Production growth will slow a bit, but keep growing (18% to 22% YOY is guidance). My SWAG is that they top the high end of their production guidance.
> Plenty of liquidity to ramp up drilling if oil prices improve.
> Great leasehold position in the Permian Basin with many years of low-risked stack pay drilling inventory.
> CXO is one of our "Elite Eight"
Check back in a few days to see the revised First Call Price Target.
Concho Resources valuation increased
Concho Resources valuation increased
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group