PDC Energy Inc. (
) shares are up 2.4% to $46.61 as analysts at Credit Suisse held
their Outperform rating on the stock, while raising the price
target to $65 and lowering its estimates on the company's annual
"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," said Credit Suisse, "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% to $1.36/$3.09/$3.76."
The firm added "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."
PDCE is trading at $46.96 in a 52-week range of $19.33 -
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