SRC Energy Inc. (NYSE: SRCI), an oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids primarily in the Denver-Julesburg Basin of Colorado.
SRC Energy’s core area of operations is in the Wattenberg Field, a very prolific oil and gas producing area where management has long-term, hands-on experience. The Wattenberg Field is in the Denver-Julesburg Basin (DJ Basin). The DJ Basin is a hydrocarbon-rich area centered in eastern Colorado that extends into southeast Wyoming, western Nebraska and Kansas. Oil and gas have been produced from the DJ Basin since its discovery in 1901.
Colorado is considering legislation that would change the way oil and gas drilling permits are issued. The Senate voted 19-16 to concur on the amendments made to SB19-181 in the House. The bill would change regulations by expanding the authority of local government/communities over drilling sites. The bill also strives to address concerns about climate change, pollution and threat to wildlife from drilling operations to, while protecting the interests of unwilling mineral rights owners.
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About
SRC Energy Inc., an oil and natural gas company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids primarily in the Denver-Julesburg Basin of Colorado. As of December 31, 2018, it had net proved oil and natural gas reserves of 88 million barrels of oil and condensate, 771.9 billion cubic feet of natural gas, and 89.1 million barrels of natural gas liquids; and operated 985 net producing wells, as well as had 95,200 gross and 86,200 net acres under lease in the Wattenberg Field. The company was founded in 2005 and is headquartered in Denver, Colorado.
Analysts
4 Wall Street analysts have issued ratings and price targets for SRC Energy in 2019.
Date Brokerage Action Rating Price Target
4/4/2019 Robert W. Baird Set Target Buy $8.00
2/8/2019 Imperial Capital Reiterated Outperform $11.00 ➝ $14.00
2/7/2019 Ifs Securities Upgrade Market Perform ➝ Outperform
2/7/2019 BMO Capital Lower Target Market Perform $7.00
1/23/2019 Raymond James Set Target Buy $8.00
Financial review
Fourth Quarter and Year End 2018 Highlights:
Revenues were $190.3 million and $645.6 million for the three and twelve months ended December 31, 2018, respectively
Net income was $82.0 million, or $0.34 per diluted share, and $260.0 million, or $1.07 per diluted share, for the three and twelve months ended December 31, 2018, respectively
Adjusted EBITDA was $143.0 million and $487.9 million for the three and twelve months ended December 31, 2018, respectively
Fourth Quarter and Year End 2018 Financial Results
Revenues for the year ended December 31, 2018, increased 78% as compared to the year ended December 31, 2017. This was due to a 48% increase in sales volumes over the period along with a 30% increase in the average realized oil price over the period.
Net income for the year ended December 31, 2018, was $260.0 million, or $1.07 per share, as compared to net income of $142.5 million, or $0.69 per share, in the prior year.
Adjusted EBITDA for the year ended December 31, 2018 was $487.9 million compared to $282.6 million for 2017, a 73% year over year increase.
Stock influences and risk factors
Strength in oil prices may act as a catalyst for the company shares.
A decline in oil and natural gas prices may adversely affect the business, financial condition, or results of operations and their ability to meet financial commitments.
They are dependent on third-party pipeline, trucking, and rail systems to transport their production and gathering and processing systems to prepare production.
New or amended environmental legislation or regulatory initiatives could result in increased costs, additional operating restrictions, or delays or have other adverse effects.
Stock chart
On Monday, April 8, 2019, SRCI shares were at $6.07 per share on traded volume of 2.5 million shares. The current RSI (14) is 73.10
At $6.07, SRCI shares are trading above their 50 DMA of $4.90 and below their 200 DMA of $7.29.
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