cbd, you may want to hold on to your PDCE a while longer, CS put out a report this a m, they are changed their methodology for NAV, used to be just a 5 yr look ahead, now incorporates total potential. They had PDCE at 65% upside to $80s, now see 290% to $192. No one in their coverage comes close, KOG is second at 120% and RRC at 109% and FANG 107%. Not sure it even incorporates much of the Utica upside, if any. Would think BCEI will get a bump with their reserve report, may not be as dramatic. They only have a 60% upside to BCEI now. Interesting that CS has not changed target prices with this change. PDCE could explode with new target.
cbd, haven't run nos lately, did look at MS data, they see mid point this year, no surprise and end of 14, 15 16 equates to 38, 39, 44. Growth drops to 10% ish after this year, they projected a drop in capex to around $500mm, will be hard to push the nos up without more capex with declines, seems a little light but maybe not. Indicated the consensus was 38 this year, that was my number also. If they do high end 36, not too bad. But at those prod vols, $630 ebitda in 15, 5x, $12 to $13 range, dilution with pref happens about then. They do express running out of liquidity late 14 but not sure. Also WTI $91 and $87, 15 and 16. Gas at $5 vs $4 in 15 gets $80mm more in cash, $5 more in liquids gets $125mm more, total $205mm. Then ebitda would be $835mm, 4x, assume all pref is converted, $20+ share. But the whole industry would be more valuable. MS indicates liquidity issues later this year, but seems revolver would take care of that, I don't know.Their 14 target of $7 is based on 5.2 multiple, to 6.2, $14 stock, don't see how it gets there unless prices are up, the whole industry is revised upward. What we lost is maybe 3k boed prod this year, that's a million boe, at $40 margin, $40mm in ebitda, x5, $200mm/68mm shs, that's $3 per share of reduced value, plus less cash for capex. Still looks like a double but the debt doesn't give them much margin for error as we just have experienced.
I think your call is the right one, MPO does have more upside and more risk. I only own those three in e and p now. I'm not as positive on MPO as I was before the guidance, but $13, a triple, by the end of next year is a possibility, 100% seems a good bet, $8.50 on today's price. The other two cos, upside in 80% to 100% range. It's a matter of the risk you want to take. Not sure MPO's risk to the down side is big at the current $4 unless they completely blow guidance or a deal is a give away. I would bet an announcement bounces the stock up but I thought that would be the case back in December. Seems the mediocre expectations are on the side of an upside surprise. The only issue with MPO now is that the geology of the Niobrara looks far superior to the Miss and Anadarko, but MPO seems to have been producing better than expected returns in both. We need more data on both. For the other two, you can extrapolate APC and NBL data easily. A downturn in oil price will not be kind to MPO's leveraged balance sheet compared to others, but with only $300 mm of equity now, not sure it gets below $200mm, $3, unless bk is on the way, and that seems remote.
didn't print the whole message, I'm betting on an ok deal $5, great deal gets you $7 plus. Either way, the fast money is not going to stick around after a good or bad deal. Compare this to PDCE, they claim a billion barrels of potential in the NIobrara, MPO saw 100 million in the Andarko, probably understated but we really don't know much about the potential there and the Miss is still puzzling, rjf's comments point to the negative. MPO and PDCE are both about the same Enterprise Value but the debt/equity % is flipped, 80% equity for PDCE and 80% debt for MPO, so anyone saying the debt doesn't matter may find out quickly one way or the other how much it does matter. We've already seen it in the past couple of weeks. If MPO had 80% equity, we would be trying to make a 30% return vs a 300% return. The risk is the same, seems the value has improved with the stock plunge. Should be interesting.
Yeah, he sure sounded confident at the last earnings conference, a deal imminent, intimated a few days away. And didn't sound he would be apologetic for the value. Oh well, what transpired could have set up a better buying opp, time will tell. Still with a deal, it's not going to be a straight shot to double digits, there will be a bunch of people cashing out that want $7+ immediately. They could surprise with a decent deal and we will be there quickly. And then the long term holders will have to wait a few quarters as things play out. If we got close to $600 mm ebitda, 5x multiple, $10 stock price, so a double + from here is not out of the realm of possibility, but it's going to take a few quarters of good execution. So $7 with a great deal and $10 first of next year, most won't have the patience to hold. So you have
cbd, have been looking at Niobrara potential. NBL has 900k acres. Believe APC has 600k and PDCE is the third largest holder. NBL claims thousands of wells. Looked at PDCE, upsided their well inventory to 2800 wells. NBL say it could maybe downspace to 20 acre spacing, at that level PDCE would have close to 5000 wells. NBL sees a 400kboe EUR and $4mm+ NPV per well. For PDCE, that's $20 billion of potential NPV to their nearly 100k acre asset. The just released PV10 as $2.7 billion and the EV of the co is $2.2 billion. BCEI has 1500 wells, that's $6 billion in potential. At this point I own MPO, a lot of BCEI and a bunch of PDCE. Seems the Niobrara is similar to the Midland Basin, Wolfcamp potential, multiple benches, but the IRRs are better for the Niobrara. Did see one valuation, they are always suspect, valued PDCE worst case, $80 oil and $2 gas at high $40s. Not sure there is much downside in MPO unless the operations are a lot worse than we have been led to believe, but PDCE and BCEI look like great upside, much more reasonable downside, minus 20% to 100% on the upside.
If oil goes to $80 for MPO, not sure it survives. Not a prediction, in fact, i have been in the camp of oil staying in the $90s+ for the long term, today with WTI pushing $100, seems the market is not giving the e and p sector credit for strength, if that happens, could see the whole group move up.
MPO downside to $3 and upside to $15. Tighten you seat belt. We have a info vacuum at the moment, anything positive gets us back to $6 quickly, or more tentative data, we are in the $3s. I think the co has screwed this up royally in the past couple of months, but it still may work out, a 36k boe/d high guidance, for $300 million of equity, probably not too many profiles like that in the sector, if any. Not anything we haven't known for a while, it's just cheaper than it was a couple of weeks ago.
Birdog, thanks, just beginning to think about it again, will get in touch. Stay warm, don't think it got out of the 20s for us yesterday. That's a spring time temp for Don.
The Board of Directors of Crestwood Equity GP LLC, general partner of Crestwood Equity Partners LP (CEQP) (“Crestwood Equity”) announced that it has declared the partnership’s quarterly cash distribution of $0.1375 per limited partner unit ($0.55 annually) for the quarter ended December 31, 2013. The distribution will be paid on February 14, 2014, to unitholders of record as of February 7, 2014.
Seems BCEI is on sale because of the CEO's departure, betting it has nothing to do with the co value, an opp.
A 6x mult gets you $70+ next year. PDCE could better that upside.
Traveled south to San Antonio this past weekend. Do you know anything about land around Comanche, saw a couple of tracts for sale, still have an itch for some land, maybe within 150 miles of DFW.
Hedge funds can't play this co, $300 million in equity, 30% in public hands, that's $90 million, out of the realm of investment for most funds. A billion dollar fund with 5% position, could buy more than half of the public float. They couldn't buy it even if they saw value, there are times when the small investor really does have an advantage. Cooperman couldn't buy this if he wanted to, SD is $3 billion in market cap vs $90 million.
Amen, well said. But I'm not sure LA can compete for capex with the other two areas, so maybe it just sits there if they can't get a decent price. Giving it away is not going to help either. As for living within cash, assume they do $575mm this year, $200mm interest, $375mm capex vs $525mm, prod increase 7k boe/d vs 10k, 25% growth vs 40%. Assume LA thows off $80mm in cash, that would cover $800mm in debt. Seems you have to get $600mm+ to make it a positive sale for cash flow. Agree, don't think they should sell Miss or Anadarko but may be forced to JV it.
cbd, from Noble, 30% better EURs maybe, to 400kboe. For BCEI, 1500 wells at 400kbs, 600 million barrels of potential. They are talking about 350 million now, and they have other potential, Ark, Co.
In the DJ Basin, volumes averaged a record 100 MBoe/d for the fourth quarter of 2013, an increase of 16 percent over the fourth quarter of 2012. Growth from strong well performance, new wells brought online, and expanded natural gas and crude oil infrastructure more than offset the impacts from the September storm flooding and the acreage exchange. During the quarter, Noble Energy completed a record 87 wells and commenced production from 90 new wells. The first Codell medium length lateral came online during the quarter and is currently producing over 500 Boe/d after two months. The first long lateral to come online in East Pony is currently producing over 700 Boe/d after 90 days. The Company continues to deliver significant drilling and completion improvements throughout the DJ Basin. In the Wells Ranch Integrated Development Plan area, ten standard length lateral wells were completed at an average cost of $4 million each. Early production on eight of the ten wells indicate estimated ultimate recovery of 400 thousand barrels of oil
equivalent per well, approximately 30 percent above the Company's average type curve in Wells Ranch.
APA raised div 25% this morning, it seems the opposite end of the spectrum from MPO, probably can make 50% return in a couple of years with some income, vs 100% for MPO with the attendant risk. APA would be a lot easier to live with.
Crum is a great driller and poor communicator, not sure you want a co where the skills are reversed. Looked at APA's Anadarko pres, lots of opp, similar to the Permian Basin, maybe not as easy to exploit but rich in hydrocarbons. Bought a bunch yesterday, s speculation at this point, but feel a good one.
As for the sector, if you believe $98 oil and $5+ gas, today's prices, vs $80 oil and $4 gas long term, as most are assuming for the sector, there is a bunch of money to be made. BCEI at $100 oil in a couple of years could be $100, bought some more yesterday. PDCE will exceed that. Looked at APA, great Permian as well as Anadarko, selling for 4x or lower '15 ebitda at today's prices. Oil stable and APA up 50%. Assume oil doesn't crater, the sector is cheap. OAS at $40, ROSE at $40. All of the Permian cos, PXD, LPI, FANG, AREX. AREX is my choice but the others should do well. Oil stays where it is, sector up 40%, probably the same on the downside if it recedes to $80. Place you bets.
Obama will probably take credit for putting the country well on the road to energy independence, worse than that, most of the electorate will believe him. I have turned off politicians all together. Not sure I'm missing much. Some days I think we are in the middle of the energy revolution and on others, I think it's almost ready to peak. Today, I'm not sure of either. I did buy some more MPO today, may be arranging the deck chairs on a sinking ship, will see. Bought back AREX yesterday, seems the Permian will be a big deal for a long time. And my favorite is PDCE, closely followed by BCEI. Looked at APC pres on the Wattenberg, 4000 wells to drill Before Tax NPV per well $5.3 million. BCEI has 1500 wells so they say, that's almost $8 billion of NPV to be had. And PDCE looks ever richer, plus the Utica. If prices don't crater, good times could continue. OAS at