Entering text into the input field will update the search result below

Goodrich Petroleum Remains An Overly Discounted Gassy Player

Steve Zachritz profile picture
Steve Zachritz


  • Goodrich reported a solid first quarter of 2020.
  • Goodrich is getting more done for less spending.
  • The balance sheet remains strong.
  • The name is one that will benefit from better natural gas prices as it is fairly low cost and tight differential and lightly hedged in 2021.

This is a Z4 quick update. For a recent longer basic piece please click here.

Since our last update for Seeking Alpha Goodrich reported solid 1Q20 results.

Key Points from the Quarter:

  • Their natural gas differential pre hedge was only 6 cents below Henry Hub again highlighting their geographic positioning to what amounts to an oversupply of midstream infrastructure.
  • Cash costs were in line with expectations. LOE (excluding workovers) of $0.23 per Mcfe was in the middle of the annual guidance range of $0.20 to $0.25. Transportation of $0.39 per Mcfe was within guidance though at the upper end of the annual guidance range of $0.30 to $0.40. G&A per Mcfe of $0.30 which is at the upper end of the annual guidance.
  • Capex in the quarter was $18.4 mm with work on 4.0 net wells (Completed 1.8 net wells in the quarter (1 in January, 0.8 in March). This is almost half the planned spending for 2020 at the lower end of the guidance range (see below).

Guidance: Capex and Production Unchanged

  • 2020 Spending: Goodrich is maintaining their prior guidance range of $40 to $50 mm. They are however seeing further declines in service costs with an expectation of a 15 to 20% savings on upcoming wells vs recent wells and this is allowing them to up the net well count by almost a full net well (5.0 net wells vs prior plan of 4.2 net) without increasing spending. In fact, they suggested coming in at the low end of the range, even with the extra well.
  • 2020 Production: No change vs prior guidance range of 137 to 142 MMcfepd. One might wonder at the lack of increase given the nearly 1 net well bump. We chalk that up to conservatism and timing of the additional well.

This article was written by

Steve Zachritz profile picture
Thanks for your interest in Z4 Energy Research. As of January 2021, Tipranks placed us in the top 2% of all financial bloggers and top 5% of overall experts. If you would like more in depth discussions on oil, natural gas, wind, solar, fuel cells, and other renewables, please contact us at zman@zmansenergybrain.com. We have covered energy at zmansenergybrain.com since 2006 posting 6 days a week and have been in the markets since the early 1990s. We post weekly slide shows on the oil and natural gas inventory reports and have daily pieces on individual names as well as group reports within a number of energy segments (Gassy Players, Permian Players, etc). Plus, Z is standing by essentially 24/7 to answer your energy questions. So come give us a try. IF you see our free pieces on Seeking Alpha rest assured that it was long ago written up, watched, mulled, and written up again on our site before we put a piece in the public free space. Also note that while we don't give investment advice we do tell you what we are thinking and when we buy and sell (on the site and via email) and show you our entire trading history (the trading blotter). And the site is fully searchable, by ticker and topic, again, back to 2006. So thanks for the follow and we hope to see your over at our site. Best Regards, Z Z4 Energy Research (Zman's Energy Brain)

Analyst’s Disclosure: I am/we are long GDP, COG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (6)

Any thoughts on why they recently did the shelf registration?
Steve Zachritz profile picture
Prudent to have a standard shelf on hand.
Provides options.
Doesn't mean any of it will be utilized.
Could be planning to term out the revolver.
Streamlines process if you want to buy something as well. There are limits placed upon value of sales they can do under the S3 based upon the current cap.
hatuffej profile picture
Not a word about their failure in 2015/2016. Maybe they can repay the equity holders they wiped out when they filed for Ch 11. BK 4 years ago.(4/15/2016) I lost $10,100 on their GDP-C preferred shares. Do you think they will have the integrity to do that? No? Then don't invest in them, ever!
Steve Zachritz profile picture
Point of order - there is a line in the cheat sheet that mentions the debt level just prior to the Ch 11. By the way, you mentioned this on my last article on them. I think I responded to you then.
hatuffej profile picture
I will continue to warn investors of the dangers of incompetent management. They seldom suffer the consequences of their actions and are never held accountable. Many times, they are awarded huge bonuses for filing BK. Check out Line Energy (LNCO) The CEO got a $25 MILLION dollar bonus after BK.
Steve Zachritz profile picture
Hear ya altruism.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.