Sweet 16 Update - Jan 30
Posted: Fri Jan 29, 2016 6:27 pm
As I predicted on New Years Day, the "gassers" that stunk it up last year are leading the pack this year.
YTD Gain
+24.6 % Antero Resources
+20.3% Gulfport Energy
+20.1% Range Resources
+25.0% Southwestern Energy
One reason is that all four companies produce a lot of Marcellus/Utica gas and NGLS. Several large 3rd party midstream projects have come on-line in that region which are SIGNIFICANTLY increased netback prices to all the producers. RRC is getting the most out of it. See the latest RRC presentation on their website. Antero Resources is the safe bet. Read what I have in the newsletter about it and you will know why. If natural gas can work its way back to $3.00, GPOR should be a double from here.
The Sweet 16 is now down just 0.07% YTD, compared to the S&P 500 Index that is down 5.07% YTD.
All of the Sweet 16 have some gas production. You can see the individual company production splits at the bottom of each company's forecast model. You can also see how much they have hedged and at what price. Others with lots of Ngas production are: XEC, DVN, EOG, NFX and SM. If Joe Bastardi is right about the Artic Blast coming in February, the Wall Street gang will spend more time looking for gas producers.
You all should take a very hard look at Newfield Exploration (NFX). In the 4th quarter they are going to report cash settlements on their hedges of close to $150 million.
NFX is my Top Pick in the STACK play and it should generate over $1 Billion in cash flow from operations this year even if WTI just averages $40/bbl for the year.
Over 70% of their 2016 crude oil production is hedged at ~$73/bbl
NFX is getting fantastic STACK wells in the Meramec zone just south of Gastar's leasehold block. In fact, they have six wells in this year's drilling program that are direct offsets to GST.
Devon Energy (DVN) looks like a great BUY, but it may take the market awhile to digest what they got in the Felix acquisition. I think they got over a BILLION BBLS of recoverable oil.
I do plan to replace SWN, but I want to see their year-end reserve report first. If you want to add more exposure to gas, GPOR looks like a good bet.
NBL and PDCE are at the top of my list for promotion to the Sweet 16.
We will update the individual Sweet 16 forecast models shortly after they release Q4 results and the profiles as soon as we can. The interns get their assignments when I get back from the EPG Cruise. I will have internet access and will check in a few times. [Susan gets pissed if I spend to much time on the internet. She is a "Party Animal". I'm am a bit worried because she told me that she has a "feeling" she is going to win big in the casino on this trip. We all know how that usually works out.]
An updated Sweet 16 summary spreadsheet will be available on the website Saturday morning. It shows my valuation compared to First Call's price target for each company.
YTD Gain
+24.6 % Antero Resources
+20.3% Gulfport Energy
+20.1% Range Resources
+25.0% Southwestern Energy
One reason is that all four companies produce a lot of Marcellus/Utica gas and NGLS. Several large 3rd party midstream projects have come on-line in that region which are SIGNIFICANTLY increased netback prices to all the producers. RRC is getting the most out of it. See the latest RRC presentation on their website. Antero Resources is the safe bet. Read what I have in the newsletter about it and you will know why. If natural gas can work its way back to $3.00, GPOR should be a double from here.
The Sweet 16 is now down just 0.07% YTD, compared to the S&P 500 Index that is down 5.07% YTD.
All of the Sweet 16 have some gas production. You can see the individual company production splits at the bottom of each company's forecast model. You can also see how much they have hedged and at what price. Others with lots of Ngas production are: XEC, DVN, EOG, NFX and SM. If Joe Bastardi is right about the Artic Blast coming in February, the Wall Street gang will spend more time looking for gas producers.
You all should take a very hard look at Newfield Exploration (NFX). In the 4th quarter they are going to report cash settlements on their hedges of close to $150 million.
NFX is my Top Pick in the STACK play and it should generate over $1 Billion in cash flow from operations this year even if WTI just averages $40/bbl for the year.
Over 70% of their 2016 crude oil production is hedged at ~$73/bbl
NFX is getting fantastic STACK wells in the Meramec zone just south of Gastar's leasehold block. In fact, they have six wells in this year's drilling program that are direct offsets to GST.
Devon Energy (DVN) looks like a great BUY, but it may take the market awhile to digest what they got in the Felix acquisition. I think they got over a BILLION BBLS of recoverable oil.
I do plan to replace SWN, but I want to see their year-end reserve report first. If you want to add more exposure to gas, GPOR looks like a good bet.
NBL and PDCE are at the top of my list for promotion to the Sweet 16.
We will update the individual Sweet 16 forecast models shortly after they release Q4 results and the profiles as soon as we can. The interns get their assignments when I get back from the EPG Cruise. I will have internet access and will check in a few times. [Susan gets pissed if I spend to much time on the internet. She is a "Party Animal". I'm am a bit worried because she told me that she has a "feeling" she is going to win big in the casino on this trip. We all know how that usually works out.]
An updated Sweet 16 summary spreadsheet will be available on the website Saturday morning. It shows my valuation compared to First Call's price target for each company.