Energy hedge funds not adding or pressing positions... waiting to see where WTI bottoms out and market pulls back. Though I think PDCE has hedged about 2/3 of its 2014 oil around $93-94 and 80% of its gas at 4.07 providing somewhat of a floor. However, if the market corrects, PDCE will go down irrespective of WTI or oil/gas hedges
Does anyone have a rationale that explains PDCE's low stock price. We have three consecutive impressive production reports, management indicating a desire to manage debt closely, and an improved political climate around fracking in Colorado. I thought we'd be in the low 70's by now. Anyone know why we're having trouble breaking out?
Would like to know more about the lawsuit that sucked out $28 million in 2Q14. Waiting to hear about Colorado regulatory issues.
Should have been more clear...PDCE beat on CFPS..Cash Flow Per Share, which is what matters most to E&P Companies. PDCE is up because they increase their production guidance by 10%.
On the call they just said their hedges on Natural gas for 2014 are at prices above Henry Hub, which is good news given the that Nat gas is in the crapper and will stay int he crapper until winter.
DENVER—A last-minute agreement on Monday between two of Colorado's top Democrats would keep off the November ballot a pair of anti-fracking measures that some in the party feared would weaken its candidates on Election Day.
Sentiment: Strong Buy
In February I said this stock was pricey when it broke through $60. Now we're into the second half of the year and soon investors will start to look towards 2015 and 2016 earnings. In 2016 PDCE will earn slightly under $5 a share.
Meanwhile PDCE is growing production and sales and, most important of all, the stock has weakened. It's now closing in on $50. Oh, and it's still got great assets and growth prospects.
So, whilst in February I said the stock at over $60 was pricey now I'll say that the stock, at just over $50, is cheap.
Today is Friday, there is worry as to what might happen over the weekend and stocks are selling off.
To that I say: Great.
At these prices I'd finally be a buyer of PDCE before the close of business today. It's been trading lower on very low volume and today is a great day to buy quietly and cheaply.
Buy and enjoy.
looks that there will not be a legislative cure, so it will go to the Colorado voters...who legalized pot and believe all businesses are evil, especially anything that they are certain (without reviewing any science) hurts the environment.
The stock got creamed because of the push to put a ballot initiative curtailing tracking, until this is resolved PDCE will be very volatile into earning, which they will probably beat.
CBD, looked at CS projections for BCEI and PDCE, 16 ebitda mutlple at 4.1x. Would think they should both be in the 8x range. Still think PDCE gets the nod with the depth of reserve potential, BCEI did improve their position. Seems both will be above $100 in two years with stable oil price. The White Cliffs starts in August, diff should improve. CS still has a $65 target on BCEI and PDCE is at $86, they are using NAV of reserves for targets. EPS for both will be in mid $5 range, 10x multiple, seems cheap on that measure too. I'm guessing that PDCE should be $10 more in stock price than BCEI. Could be a good trade but I'm a lousy short term trader.
A CS comment on PDCE and CO trying to regulate drilling. I would be that PDCE price now will look good after earnings release, and oil seems to be bumping back up today. May buy some more today.
On the regulatory side, there is rising noise concerning frac regulation in Colorado (as well as
California) with two key Colorado initiatives of the initial 11 (one pertaining to
local control and the other increasing wellbore setbacks) remaining in the
process of obtaining signatures for inclusion on the November state ballot.
We argue PDCE’s 15% underperformance versus the EPX in the past
month on the back of this risk offers investors a solid entry point/
My math was faulty on linking but bottom line is if you believe the market's undervalued, the sector isn't reflecting $100 oil and the company is undervalued, PDCE looks like an easy bet. I think it's a double plus and BCEI won't be far behind. Seems SN will do well also.
I agree, just listening to Leon Cooperman. Said that 50% of a stock move is related to the market, 30% to the sector and 20% to the company. My belief is the market could go another 40%, a multiple of 20x, before we roll over. Valuation of the sector could move up 30% on a move to $100 vs maybe $90 and I think PDCE is undervalued by 30% at least. 1.40x 1.30x 1.30% is 130% upside from $56, $130%. Most of the sector should do well if those expectations become reality. My favorite investment now is PAGP, the GP of PAA, the best oil infrastructure company, you mentioned the pipeline in the Wattenberg, White Cliffs I assume, owned by SEMG, probably they get bought buy someone.
The other company that I would like to own is GDP, for the TMS play. They own 300k acres in the play and for a billion market cap, they could triple if the play is as good as some say it is, HK and ECA both see it as core assets.
Again, good move on BCEI and I agree with you, now is the time to buy cos in the energy space that you like, if you believe Cooperman, 80% of the return is market/sector related, doesn't hurt if you get the co right also. PDCE is my bet and others should do well also.
Thanks Harehau. The pipeline will help BCEI's WTI discount. Maybe PDCE will mention it in the upcoming ER. Looking to add some PDCE and SN. Maybe a little at a time in case the WTI keeps dropping and that keeps sellers motivated. They are all great buys here with WTI at current price IMHO.
Sentiment: Strong Buy
CBD, don't remember about the pipe for PDCE. I have been buying PDCE the past few days, seems to me to be as good a value as any in the sector, not quite sure why the relative weakness although it had a good run before. I thought about moving PDCE to BCEI in the low $40s, good move on your part. I don't own SN at the moment, sold it at a few dollars higher and think it's a $40 plus stock easily. I want to think this sell off gives an opp and oil stays at around $100 for a while. I am rolling the dice on PDCE, will probably buy more. I still think it is a $90+ value min. Saw Scott Black on recently, had a $90 value for proved plus $70 for additional potential.