Bill Barrett's (BBG) lower-than-expected production guidance for 2014 sent the stock down by 17% on the trading session yesterday. Was the market's reaction justified?
The Guidance Analysis
The following are the key takeaways from the announced 2014 guidance:
- The $500-$550 million capex in 2014 includes participation in ~200 gross/100 net wells, including ~85 gross operated wells in the Niobrara/Codell play, 35 gross operated wells in the Uinta and approximately 80 non-operated wells.
- 5 rigs are planned to be operated throughout the year on average: 3 in the Niobrara and 2 in the Uinta.
- The Niobrara will be the budget priority, receiving ~75% of total capital in 2014. Production from the DJ Basin is expected to "more than triple"
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