EOG Resources (EOG) - New Forecast
Posted: Sat Jan 14, 2017 3:36 pm
I have updated my EOG forecast model and extended it through 2018. EOG is the largest company in the Sweet 16 by a rather large margin. Current production is ~600,000 BOE per day and heading to more than 750,000 BOE per day by year-end. Per EOG, they have 15% to 25% annual production growth locked in for at least the next five years.
EOG arguably has the most valuable upstream assets in North America. It deserves to be a Core Holding in any portfolio.
I have increased my valuation by $3.60/share to $113.60, which compares to First Call's price target of $111.21.
I could easily justify a much higher valuation, but with none of their oil hedged, I am using a 12X multiple of operating cash flow per share to value it.
EOG's cash flow from operations s/b over $5.5 Billion in 2017, more than enough to fund a very aggressive drilling program if they choose to do so.
EOG's acquisition of Yates in October gives them plenty of running room in the Permian Basin.
EOG arguably has the most valuable upstream assets in North America. It deserves to be a Core Holding in any portfolio.
I have increased my valuation by $3.60/share to $113.60, which compares to First Call's price target of $111.21.
I could easily justify a much higher valuation, but with none of their oil hedged, I am using a 12X multiple of operating cash flow per share to value it.
EOG's cash flow from operations s/b over $5.5 Billion in 2017, more than enough to fund a very aggressive drilling program if they choose to do so.
EOG's acquisition of Yates in October gives them plenty of running room in the Permian Basin.