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Douglas E. Johnston

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  • PDC Energy Reports Q1'12 Results [View article]
    Bill - I am with you on this one.
    Nov 27 04:23 PM | Likes Like |Link to Comment
  • PDC Energy Reports Q1'12 Results [View article]
    I like the company - and we own some. Their debt profile is very attractive in today's environment and the stock offering for the Wattenberg field was smart -> they are ahead of the curve. The only thing is they have to get costs down. Currently, they are at $1.54 production cost per mCfe (equiv) - that is double from where they were in 2006 _and_ does not include transportation (which gets baked into the wellhead price). Also, G&A is way too high at $1.37 per mCfe last year. These both seem way too high versus industry standard and, from our calculations, implies a > $5.75 per mCfe sales price is needed on the recent acquisition to break even; they have been averaging in the mid 6s recently. Of course, this doesn't include any 3P potential. If they can get costs down and get back to their historical average of $2-3 mCfe net profit, this should be trading $40 today. Good news is that they, unlike some others, will survive this NG lull unscathed, we believe.
    May 21 02:45 PM | Likes Like |Link to Comment
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