What’s a few fewer bucks per barrel and half-dollar per MMBtu mean among Shannon Nome’s estimates for 22 U.S. oil and gas producers’ earnings and cash flow per share for this quarter and the full year? Nome, a Houston-based managing director and senior E&P analyst for Deutsche Bank, ran the 22 E&P stock names she covers through lower average oil- and gas-price forecasts for this quarter and the new EPS and CFPS estimates are down by pennies. “All of our E&P ratings and target prices remain unchanged,” she reports. With one noteworthy trend: Losing EPS and CFPS estimates for Delta Petroleum Corp. are even worse with the new price estimates. Shares of DPTR are the only ones in her coverage group she has a Sell rating on. The new price-forecast figures are of averages of $64 for West Texas Intermediate and $7 for Henry Hub gas, down from $70 and $7.50, in this quarter. The price forecasts for 2009 and 2010 are unchanged from figures developed some weeks ago, ranging from $50 to $68 for WTI and $7.50 to $8.50 for natural gas. “Although we have recently moved to a cash-flow-based methodology for valuing E&P stocks, each producer’s asset intensity and prospective NAV still has a strong bearing on the target multiple premium/discount accorded. Our target prices incorporate target EV/DACF multiples based on the merits of a given stock relative to its peer group and its own trading history,” she reports. She has the following recommendations: Apache Corp. at $76.04, Hold; Anadarko Petroleum at $37.82, Hold; Bill Barrett Corp., $20.33, Hold; Chesapeake Energy, $21.23, Buy; Continental Resources Inc., $22.54, Hold; Delta Petroleum, $5.69, Sell; Devon Energy, $70.14, Buy; EnCana Corp., $44.46, Hold; EOG Resources, $80.63, Hold; Equitable Resources, $30.00, Buy; Forest Oil, $19.80, Hold; Goodrich Petroleum, $27.76, Hold; Quicksilver Resources, $7.78, Hold; Noble Energy, $50.61, Hold; Newfield Exploration, $19.89, Hold; Pioneer Natural Resources, $22.27, Hold; Range Resources, $40.62, Buy; SandRidge Energy Inc., $10.07, Hold; Southwestern Energy Co., $30.26, Buy; Ultra Petroleum, $44.50, Hold; Exco Resources, $7.05, Buy; and XTO Energy, $33.54, Buy. –Nissa Darbonne, Executive Editor, Oil and Gas Investor, A&D Watch, OilandGasInvestor.com Today,
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