Stock Alert for Delta Petroleum Corp. (DPTR)
Delta Petroleum Corp. (NASDAQ: DPTR)
Delta Petroleum Corp. (DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production and sale of natural gas and crude oil. DPTR operated in two business segments: acquisition, exploration, development and production of oil and natural gas properties and related business activities, and contract oil and natural gas drilling operations. The primary areas of activity are in the Rocky Mountain and Gulf Coast Regions with additional unproved exploratory leaseholds in the Columbia River Basin in southeastern Washington, the Hingeline area of Central Utah and the Haynesville Shale area of Texas, among others. As of December 31, 2009, the Company’s proved reserves were comprised of approximately 126.7 billion cubic feet of natural gas and 4.5 Mmbbls of crude oil.
DPTR was founded in 1984 and is based in Denver, Colorado.
| Share Statistics (3-June-10) | FY2008 | FY2009 | % Chg | Q12009 | Q1 2010 | % Chg | ||
| Symbol | DPTR | Revenue, $Mn | 271.18 | 182.44 | -32.7% | 58.66 | 43.96 | -25.15 |
| Current price | $1.22 | Gross marg. | 67.0% | 66.0% | -1.5% | 68.7% | 54.5% | -20.7% |
| 52wk Range: | 0.73-4.68 | Oper. margin | – | -139.4% | – | – | -41.9% | – |
| Avg Vol (3m): | 6,928,30 | Net margin | -168.4% | -180.2% | 7.0% | -43.6% | -29.1% | -33.3% |
| Market Cap. | 345.00M | |||||||
| Shares Outstanding | 282.78M | EPS, $ | -1.60 | -0.94 | -41.3% | -0.24 | -0.05 | -79.2% |
Source: Reuters.com, SEC Filings.
Financial Summary
For the quarter ended March 31, 2010, the Company reported production of 5.0 billion cubic feet equivalents (Bcfe), a decrease of 20% when compared with the first quarter of 2009. The production decrease was mostly related to expected production declines in the Rockies that have not been offset by additional drilling. Total revenue decreased 25% to $44.0 million in the quarter, versus revenue of $58.7 million in the quarter ended March 31, 2009, primarily related to a $31.3 million gain associated with the offshore California litigation in 2009, partially offset by a $12.3 million quarter-over-quarter increase in oil and gas sales.
For the quarter ended March 31, 2010, oil and gas sales increased 55% to $34.5 million, as compared to $22.2 million for the prior year period. The increase was primarily the result of a 125% increase in oil prices and an 86% increase in natural gas prices, partially offset by the 20% decrease in production. The average oil price received during the quarter ended March 31, 2010, increased to $70.78 per Bbl compared to $31.44 per Bbl for the prior year period. The average natural gas price received during the quarter ended March 31, 2010, increased to $5.70 per thousand cubic feet (Mcf) compared to $3.07 per Mcf for the prior year period.
The Company reported a first-quarter net loss attributable to common stockholders of ($12.8 million), or ($0.05) per share, compared with a net loss attributable to common stockholders of ($25.6 million), or ($0.25) per share, in the first quarter of 2009.
At March 31, 2010, the Company had $10 million in cash and $52.0 million available under its credit facility.
Source: Delta Petroleum Corp.
| Financial Strength (03-June-2010) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | 0.40 | 2.03 | 0.70 | 0.80 |
| Current Ratio (MRQ) | 0.41 | 2.10 | 0.94 | 0.96 |
| LT Debt to Equity (MRQ) | 51.65 | 8.27 | 35.20 | 133.65 |
| Total Debt to Equity (MRQ) | 77.61 | 8.68 | 45.03 | 199.98 |
| Interest Coverage (TTM) | – | -0.17 | 12.88 | 41.62 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
| Buy | Outperform | Hold | Underperform | Sell | No Opinion |
This is the consensus forecast amongst five polled investment analysts. Against the Delta Petroleum Corp company.
| Analyst Detail | Buy | Outperform | Hold | Underperform | Sell | No Opinion |
| Latest | 0 | 0 | 2 | 3 | 0 | 0 |
| 4 weeks ago | 0 | 0 | 2 | 3 | 0 | 0 |
| 2 months ago | 0 | 0 | 2 | 3 | 0 | 0 |
| 3 months ago | 0 | 0 | 2 | 3 | 0 | 0 |
| Last year | 0 | 0 | 4 | 1 | 2 | 0 |
The one analyst offering a 12-month price target expects DPTR share price to rise to 1.40 in the next year from the last price of 1.15.
Source: www.ft.com
Consensus Estimates Analysis
| # of Estimates | Mean | High | Low | 1 Year Ago | |
| SALES (in millions) | |||||
| Quarter Ending Jun-10 | 3 | 32.69 | 36.65 | 28.00 | 32.77 |
| Quarter Ending Sep-10 | 3 | 31.84 | 33.65 | 29.00 | 33.13 |
| Year Ending Dec-10 | 4 | 136.92 | 148.32 | 117.00 | 145.60 |
| Year Ending Dec-11 | 4 | 159.06 | 171.00 | 149.00 | – |
| EARNINGS (per share) | |||||
| Quarter Ending Jun-10 | 6 | -0.10 | -0.04 | -0.13 | -0.07 |
| Quarter Ending Sep-10 | 5 | -0.08 | -0.03 | -0.11 | -0.07 |
| Year Ending Dec-10 | 7 | -0.39 | -0.17 | -0.46 | -0.32 |
| Year Ending Dec-11 | 7 | -0.28 | -0.14 | -0.42 | – |
| LT Growth Rate (%) | 1 | 4.00 | 4.00 | 4.00 | 28.00 |
Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=DPTR.O
Investment Highlights
DPTR engages primarily in the exploration for, and the acquisition, development, production and sale of natural gas and crude oil. The Company’s core areas of operation are the Rocky Mountain and Gulf Coast Regions, which comprise virtually all of its proved reserves, production and long-term growth prospects. It has a significant drilling inventory that consists of proved and unproved locations, the majority of which are located in its Rocky Mountain development projects. At December 31, 2009, the Company had estimated proved reserves that totaled 153.6 billion cubic feet equivalents (Bcfe), of which 86.5% were proved developed, with an after-tax PV-10 value of $156.7 million. For the year ended December 31, 2009, DPTR reported net production of 60.7 million cubic feet equivalent (Mmcfe) per day. As of December 31, 2009, its proved reserves were comprised of approximately 126.7 billion cubic feet (Bcf) of natural gas and 4.5 millions of barrels (Mmbbls) of crude oil, or 82.4% gas on an equivalent basis. Approximately 73% of its proved reserves were located in the Rocky Mountains, 26% in the Gulf Coast and less than 1% in other locations.
According to the Company, its long-term business strengths include a multi-year inventory of attractive lower risk drilling on long-lived Rockies properties. The Company believes this will allow it to grow reserves and replace and expand production organically without having to rely solely on acquisitions, and significant leasehold positions in several high potential exploratory areas.
The Company has stated that it expects its 2010 drilling efforts and capital expenditures, when announced, to focus primarily on its Piceance Basin assets in the Rockies. DPTR is looking to announce this year’s drilling plans and expected oil and gas production once its strategic alternatives evaluation process and borrowing base redetermination are complete.
Recent Company News
The Company on Tuesday said it extended negotiations with Opon International LLC on a $400 million asset sale. DPTR said it does not plan to make any further comment about the negotiations until such time as it believes disclosure is warranted.
In March DPTR entered into a non-binding letter of intent with Opon to sell a 37.5% non-operated working interest in its Vega Area assets located in the Piceance Basin for total consideration of $400 million. As part of the deal, DPTR agreed to issue Opon stock warrants to purchase 13.3 million shares of DPTR common stock at $1.50 per share and 5.7 million shares at $3.50 per share.
Source: Delta Petroleum Corp.
Technical Analysis
Source: http://stockcharts.com
Wednesday, DPTR closed above its 13-day moving average. This is generally considered to be an indication of a bullish trend.
DPTR is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.
DPTR’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below zero, which suggests that the underlying moving averages are bearish.
Comparative Analysis
| Company Name | Ticker | Price per | Mrkt. Cap. | P/E | P/S | ||
| June-03-2010 | symbol | Share, $ | $ Mn | 2010 | 2011 | 2010 | 2011 |
| Cabot Oil & Gas Corp. | COG | 37.17 | 3,860 | 34.42 | 41.76 | 4.40 | 4.02 |
| Chesapeake Energy Corp. | CHK | 24.86 | 16,180 | 8.23 | 8.18 | 1.60 | 1.55 |
| Denbury Resources Inc. | DNR | 16.62 | 6,640 | 30.22 | 18.67 | 3.82 | 3.18 |
| Independent Oil & Gas Median | 23.43 | n/a | 3.45 | n/a | |||
| Delta Petroleum Corp | DPTR | 1.22 | 345.00 | n/a | n/a | 2.62 | 2.28 |
Source: Thomson Financial
Insider Trading Activity
| NET SHARES PURCHASE ACTIVITYInside Purchases – Last 6 Months | ||
| Shares | Transaction | |
| Purchases | n/a | 0 |
| Sales | n/a | 0 |
| Net Shares Purchased (Sold) | n/a | 0 |
| Total Insider Shares Held | 103.54M | n/a |
| % Net Shares Purchased (Sold) | 0.0% | n/a |
| Net Institutional Purchases — Prior Qtr to Latest Qtr | |
| Shares | |
| Net Shares Purchased (Sold) | (22,982,800) |
| % Change in Institutional Shares Held | (84.9%) |
Source: Yahoo Finance
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