Stock price when the opinion was issued
At least 15 years of drilling inventory in Bakken play. Very strong balance sheet (almost no debt). Expecting ~60% of free cash flow returning to shareholders. Trading under 3x cash flow with $80 oil. Expecting ~$29 share price next year given $80 oil. Expecting strong performance in 2024. Value proposition very strong.
ERF is very cheap and has a very solid balance sheet. The forecast release was not great, but it is not really an issue with the company. As noted, 4Q production also did beat production estimates. Consensus still calls for about 20% growth this year. It is hard to fight declining commodity prices, but based on its valuation and balance sheet we would consider it a HOLD and a BUY on any further weakness.
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Sold because he became very bearish on natural gas, bullish on oil. Lots of drilling and no real winter last year meant that storage was high. Still on his radar, but no price catalyst until this time next year. Minimizing growth and maximizing free cashflow, buybacks, very aggressive.