PETROLEUM DEVELOPMENT CORP.
(NASDAQ: PETD)
Long-Term: STRONG-BUY Short-Term: BUY
(1 st Quarter Generally In Line with Expectations – Raise 2001 EPS Estimates - Re-Iterate L/T: Strong-Buy, S/T: Buy)
Petroleum Development Corp. (“PDC”) announced 1 st quarter net income of $5.6 million. This
figure was $400,000 short of our estimate of $6 million for the same period. The bulk of the
difference was in a non-cash charge of $400,000 related to hedging positions resulting from new
FASB 133 accounting treatment. Production volumes were in line, while lifting costs dropped to
$5.85 per BOE from our estimate of $7.00 per BOE. As a result of continued strong sales of
partnerships, lower lifting costs and the expiration of certain hedging positions; we are raising
our 2001 EPS estimate to $1.10 per share on a fully diluted basis. We have adjusted our Cash
Flow model in particular relating to Deferred Taxes and have lowered our CFPS estimate to $1.63
per share. We anticipate EBITDA in 2001 at $36.1 million or $2.12 per share. Our RABUV has
been maintained at $9.71 per share. Based on these results and continued confidence through
2001, we re-iterate our current ratings of Long-Term: Strong-Buy, Short-Term: Buy. Based
on a P/E ratio of 10 times, shares could be trading at $11.00 per share based on our 2001
estimates. We believe our goal price of $13.50 remains reasonable.
QUARTERLY PROJECTIONS 1st - A 2nd - E 3rd - E 4th - E 2001
Total Revenues 59,541,400 $ 48,358,600 $ 33,603,140 $ 40,473,380 $ 181,976,520 $
Total Expenses 51,505,700 $ 41,136,321 $ 28,309,287 $ 34,210,107 $ 155,161,415 $
Operating Profit (Loss) 8,035,700 $ 7,222,279 $ 5,293,853 $ 6,263,273 $ 26,815,105 $
Net Income (Loss) 5,625,000 $ 5,019,484 $ 3,679,228 $ 4,352,975 $ 18,676,687 $
Earnings Per Share (F/D) 0.33 $ 0.30 $ 0.22 $ 0.26 $ 1.10 $
Cash Flow Per Share (F/D) 0.47 $ 0.42 $ 0.35 $ 0.39 $ 1.63 $ |
