For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in PDC Energy ten years ago? It may not have been easy to hold on to PDCE for all that time, but if you did, how much would your investment be worth today?
PDC Energy's Business In-Depth
With that in mind, let's take a look at PDC Energy's main business drivers.
PDC Energy, Inc. is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. Headquartered in Denver, CO, the firm is focused on the Wattenberg Field in Colorado and the Delaware Basin in Texas. PDC Energy’s Wattenberg operations are centered around the Niobrara and Codell formations, while the Delaware Basin development primarily targets the Wolfcamp zones. The company, which reached its present form following the January 2020 combination with SRC Energy, is currently the second-largest producer in the Denver-Julesburg (‘DJ’) Basin behind Occidental Petroleum.
The Wattenberg Field is PDC Energy’s core operating region where it has around 1800,000 net acres. Meanwhile, in the Delaware Basin, the domestic exploration and production (E&P) entity controls approximately 25,000 net acres. During the most recent quarter, the company reported total production of 19,405 thousand barrels of oil-equivalent (MBoe), of which 16,732 MBoe per day (or some 86%) came from the Wattenberg Field and the rest from Delaware Basin.
At Dec 31, 2021, PDC Energy's total estimated proved reserves were 213,845 thousand barrels (MBbls) of oil, 240,389 MBbls of natural gas liquids (“NGL”) and 2,159,725 million cubic feet (MMcf) of natural gas, totaling 814,188 thousand barrels of oil-equivalent (MBoe) — 56% liquids, 49% developed.
PDC Energy generated revenues of $1.9 billion from its operations last year, up 39% year over year. The company — focused on growth through a combination of acquisitions and active drilling — spent around $583.1 million on oil and gas capital expenditures in 2021. The company expects to generate approximately $2.7 billion in cumulative free cash flow (at a WTI price of $75, natural gas at $4 and NGL at $27.50) this year and next, while returning $1.7 billion to its shareholders during this period.
As of Dec 31, 2021, PDC Energy had approximately $33.8 million in cash and cash equivalents, and $942.1 million in long-term debt, representing a debt-to-capitalization of 24.5%.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in PDC Energy ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in June 2012 would be worth $3,185.99, or a gain of 218.60%, as of June 1, 2022, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 215.35% and the price of gold went up 8.66% over the same time frame.
Going forward, analysts are expecting more upside for PDCE.
PDC Energy is an independent exploration and production operator with the Wattenberg Field in Colorado being its chief operating region. Following the SRC Energy deal in 2020, PDC Energy has emerged as the second-largest oil producer in the DJ Basin to go with its existing Delaware acreage. The company has a favorable debt maturity profile with little in near-term due, while a disciplined approach to capital spending together with surging oil and natural gas prices should boost cumulative free cash flow generation to $2.7 billion in 2022 and 2023. PDC Energy’s cash flows will also receive downside protection from attractive oil hedges. Therefore, while the company’s stock price is up more than 70% over the trailing 12-month period, PDC Energy has still got significant upside potential. This accounts for our bullish stance
Shares have gained 7.73% over the past four weeks and there have been 5 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.