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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (177523)	4/4/2013 9:15:10 AM
From: Dennis Roth	2 Recommendations Read Replies (2) \| Respond to of 206159

SMID E&Ps Credit Suisse Sector Review 02 April 2013, 26 pages, 28 exhibits Download available at the bottom of This Page. Higher Recycle Ratios Point to Operational Efficiency. Within our coverage universe, we look at cash-on-cash returns by focusing on 3-year recycle ratios (cash flow per unit divided by unit organic F&D costs) to determine which producers are efficiently running their operations. REXX, RRC and ROSE stand out as the companies with recycle ratios meaningfully higher than the median of 1.6x, while PVA and FST screen as less efficient with recycle ratios of 0.1x and 0.2x, respectively. All-In F&D Including Revisions Increases to $23.82 per Boe. For 2012, we estimate that all-in F&D (including revisions) increased to $23.82 per Boe, up 34% yr/yr from $17.76 per Boe at YE 2011, while organic F&D (excluding revisions) increased to $18.31 per Boe, up 44% yr/yr from $12.78 Boe. Proved undeveloped (PUD) percentages for our coverage universe fell in the wake of weak natural gas prices to 47% from 53% in 2011. Future Development Costs. One method of gauging future asset efficiency are unit future development costs (FDCs), which came in at a median $19.06 per Boe for 2012 vs. $18.45 per Boe in 2011. REXX, CRK and RRC have the lowest per unit future development cost at YE 2012, while FST, EXXI and GPOR have the highest. Overall F&D Survey. We also provide our analysis on 2012 finding and development (F&D) costs and reserve replacement (RR) for 65 producers that we track.

To: Dennis Roth who wrote (177523)	4/5/2013 12:02:30 PM
From: Dennis Roth	2 Recommendations Read Replies (2) \| Respond to of 206159

PDC Energy (PDCE) Capex Shock Offset by Niobrara Awe 05 April 2013, 10 pages from Credit Suisse download link at the bottom of This Page Reiterate Outperform and Raise TP to $65. We reiterate our Outperform rating on PDCE and raise our target to $65 (from $63). While higher than anticipated 2014/15 capex guidance, along with conservative Utica type curves and spacing assumptions in the Wattenberg drove weakness in shares during yesterday’s presentation, we argue data from infill drilling and additional horizons in the Wattenberg help define a potentially massive resource for the company. Based on updated guidance and production mix, we revise our 2013/14/15 EPS estimates by -14%/-15/%-31%. Unearthing Huge Wattenberg Potential. PDCE did not disappoint on defining the resource potential of its core Wattenberg position in its analyst day. Strong results from initial downspacing tests in the Niobrara B suggest that 40-acre development will be required to maximize resource recovery. PDCE’s initial Niobrara C well is tracking a just under a 500 MBoe type curve and the first Niobrara A well is performing in line with a 300 MBoe type curve. While PDCE did not have enough data to definitively say that the Codell is performing better than the Niobrara B, early data suggests that Codell could provide a project NPV greater than 50% better. Despite positive data points on the potential from a stacked pay and density perspective, PDCE refrained from increasing its gross inventory of 2,000 locations (assuming a respective 100-acre and 320-acre spacing in the Niobrara B and Codell). With time we expect inventory to more than double as PDCE and peers delineate the stacked pay potential in the Wattenberg. Valuation. PDCE is trading at a 29% discount to our revised ‘PD Plus’ NAV estimate vs. a 23% discount for the CS SMID-cap E&P peer group. On multiples, PDCE is trading at 8.0x and 6.0x 2013E and 2014E EBITDA (hedged at CS Price Deck) vs. peers at 5.4x and 3.8x, respectively.