In a June 18 research note, ROTH Capital Partners analyst John White reported that Goodrich Petroleum Corp.'s (GDP:NYSE) "excellent" three-year reserve replacement cost (RRC) and finding and development cost (F&DC) "are the best in our coverage."
With its three-year RRC and its three-year F&DC, both at $1.96 per barrels of oil equivalent ($1.95/boe), the company ranks first among ROTH's exploration and production coverage universe for each. The numbers is the same for both because all growth during that period occurred through drilling and not acquisitions.
"The figures demonstrate, in our view, the strong characteristics of the asset base and Goodrich's management and technical expertise," White commented.
White also presented ROTH's revised estimates for Goodrich's Q2/19. Forecasted cash flow per share and EBITDA are $1.29 million and $18 million, similar to its previous figures of $1.26 million and $18.2 million. Projected production is now higher, at 135,704 thousand cubic feet equivalent per day (135,704 Mcfe/day) versus 129,926 Mcfe/day previously.
ROTH lowered Goodrich's realized natural gas price for Q2/19 to 2.3 per million British thermal units (2.3/MMBtu) from $2.40/MMBtu due to higher differentials, but noted it should not affect revenue.
In terms of expenses, ROTH expects higher transportation costs to offset lower operating costs. Its estimated earnings per share for Q2/19 is $0.16, down from its previous $0.25 on higher depreciation, depletion and amortization, only partially offset by lower interest expense.
ROTH has a Buy rating and a $23 per share price target on Goodrich, whose stock is currently trading at around $11.10 per share.
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Disclosures from ROTH Capital Partners, Goodrich Petroleum Corp., Company Note, June 18, 2019
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of Goodrich Petroleum Corp. and as such, buys and sells from customers on a principal basis.
A Research Analyst and/or a member of the Analyst's household own(s) debt or equity securities of Goodrich Petroleum Corp. stock.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
