Stock Alert for Delta Petroleum Corp. (DPTR)
  • Stock Alert for Delta Petroleum Corp. (DPTR)
  • Stock Alert for Delta Petroleum Corp. ($DPTR)
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    Stock Alert for Delta Petroleum Corp. (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. The Company’s core area of operation is the Rocky Mountain Region, where the majority of its proved reserves, production and long-term growth prospects are located. The Company has a significant development-drilling inventory that consists of proved and unproved locations. As of December 31, 2009, the Company’s proved reserves were comprised of approximately 126.7 billion cubic feet (Bcf) of natural gas and 4.5 million barrels (Mmbbls) of crude oil, or 82.4% gas on an equivalent basis.

    DPTR was founded in 1984 and is based in Denver, Colorado.

    Share Statistics (28-Feb-11) FY

    2008

    FY

    2009

    %

    Chg

    Q3

    2009

    Q3

    2010

    %

    Chg

    Symbol DPTR Revenue, $Mn 271.18 182.44 -32.7% 21.45 35.44 65.2%
    Current price $1.17 Gross marg. 67.0% 25.5% -61.9% 46.3% 39.6% -14.5%
    52wk Range: $0.67-$1.95 Oper. margin -139.4% -45.0%
    Avg Vol (3m): 2,129,050 Net margin -168.2% -180.2% 7.1% -451.4% 39.3% -108.7%
    Market Cap. 333.70M
    Shares Outstanding 285.22M EPS, $ -1.60 -0.94 -41.3% -0.21 -0.06 -71.4%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Continuing its winning streak for the fourth consecutive day, DPTR added $0.18, or 18.8%, to close Monday at $1.17.  The stock traded on high volume of over 38.92 million shares Monday, nearly 18 times the average three-month volume.  DPTR has a 52-week range of $0.67 – $1.95 and is currently trading above its 50-day and 200-day moving averages.  At Monday’s closing market price, DPTR’s market capitalization stands at $333.70 million.

    The Denver-based independent oil and gas company is expected to report its next quarterly earnings on March 7, 2011. During the third quarter, the Company reported net income attributable to common stockholders of $13.9 million, or $0.05 per diluted share, compared with a net loss attributable to common stockholders of $96.8 million, or $0.35 per diluted share, in the third quarter of 2009.  DPTR president and CEO Carl Lakey stated that the Company continued to take steps to improve its operating results, has reduced personnel and associated overhead expenses, and continues to execute on its planned completion program for the fourth quarter, which includes nine wells.

    As previously reported, DPTR completed four wells in the Vega area during the third quarter of 2010.  The other two completions were of the entire gas column.  From the remaining uncompleted well inventory, the Company said it completed four wells in October and planned on completing an additional five wells by the end of 2010.  DPTR stated that it expects fourth-quarter production to be in line with previously provided guidance and range between 3.25 billion cubic feet equivalents (Bcfe) and 3.55 Bcfe.

    Visit DPTR at www.deltapetro.com

    Financial Summary

    The Company reported third-quarter net income attributable to common stockholders of $13.9 million, or $0.05 per diluted share, compared with a net loss attributable to common stockholders of $96.8 million, or $0.35 per diluted share, in the third quarter of 2009.

    For the quarter ended September 30, 2010, the Company reported total production of 3.65 Bcfe.  The decrease in production when compared to the same period of 2009 is primarily the result of the asset sale to Wapiti on July 30, 2010.

    Total revenue increased 65% to $35.4 million in the quarter, versus revenue of $21.4 million in the quarter ended September 30, 2009.  The increase is primarily related to a $12.7 million increase in contract drilling and trucking fees from improved third party rig utilization.  For the quarter ended September 30, 2010, oil and gas sales increased 6% to $20.2 million, as compared to $19.1 million for the prior year period.  The increase was primarily the result of a 79% increase in natural gas prices and a 12% increase in oil prices, partially offset by a 23% decrease in production from continuing operations. The average natural gas price received during the quarter ended September 30, 2010, increased to $4.52 per thousand cubic feet (Mcf) compared to $2.52 per Mcf for the prior year period.  The average oil price received during the quarter ended September 30, 2010, increased to $69.13 per barrel (Bbl) compared to $61.89 per Bbl for the prior year period.

    Results for the nine months ended September 30, 2010

    The Company reported a nine-month net loss attributable to common stockholders of ($148.6 million), or ($0.54) per diluted share, compared with a net loss attributable to common stockholders of ($294.7 million), or ($1.55) per diluted share, in the nine months ended September 30, 2009.  The net loss attributable to common stockholders for the nine months ended September 30, 2010, includes dry hole and impairment costs of $30.9 million as compared to $161.5 million for the year earlier period.

    For the nine months ended September 30, 2010, the Company reported total production of 13.4 Bcfe.  Approximately 2.0 Bcfe of production for the nine-month period was from assets sold in the Wapiti Transaction, which is accounted for under “Discontinued Operations.”  The following discussion is on a “Continuing Operations” basis.

    Total revenue increased 13% to $110.4 million for the nine months ended September 30, 2010, versus revenue of $97.3 million in the nine months ended September 30, 2009.  The increase is mostly related to a $17.9 million period-over-period increase in oil and gas sales and a $26.8 million increase in contract drilling and trucking fees, due to improved third party rig utilization.  For the nine months ended September 30, 2010, oil and gas sales increased 32% to $74.7 million, as compared to $56.8 million for the prior year period.  The increase was primarily the result of a 95% increase in natural gas prices and a 46% increase in oil prices, partially offset by a 22% decrease in production from continuing operations, due to the asset sale with Wapiti.  The average natural gas price received during the nine months ended September 30, 2010, increased to $5.12 per Mcf compared to $2.62 per Mcf for the year earlier period.  The average oil price received during the nine months ended September 30, 2010, increased to $70.16 per Bbl compared to $47.93 per Bbl for the year earlier period.

    Liquidity Update

    At September 30, 2010, the Company held approximately $14.2 million in cash and $13.5 million was available for borrowing under the current credit facility.  The Company is limited to capital expenditures of $18.5 million for the quarter ending December 31, 2010, based on the original limitation of $10 million and $8.5 million carried forward from the quarter ended September 30, 2010.  The Company was in compliance with its covenants under its credit facility as of September 30, 2010.  The Company continues to move forward with potential lenders to replace its existing facility prior to its maturity.

    Source: www.deltapetro.com


    Financial Strength (28-Feb-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 0.63 0.94 0.43 0.51
    Current Ratio (MRQ) 0.65 1.06 0.59 0.82
    LT Debt to Equity (MRQ) 47.12 6.71 12.80 107.37
    Total Debt to Equity (MRQ) 64.19 7.67 18.60 151.63
    Interest Coverage (TTM) -6.96 -0.32 2.97 15.78

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among five polled investment analysts. Against the Delta Petroleum Corp company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 0 0 1 4 0 0
    4 weeks ago 0 0 1 4 0 0
    2 months ago 0 0 1 4 0 0
    3 months ago 0 0 1 4 0 0
    Last year 0 0 2 3 0 0

    The two analysts offering 12-month price targets for DPTR have a median target of 0.49, with a high estimate of 0.75 and a low estimate of 0.23. The median estimate represents a -50.51% decrease from the last price of 0.9901.

    Source: markets.ft.com

    Consensus Estimates Analysis


    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Mar-11 3 28.07 36.52 21.00 32.93
    Quarter Ending Jun-11 3 28.02 36.58 21.00 35.68
    Year Ending Dec-11 4 118.89 149.88 84.00 140.28
    EARNINGS (per share)
    Quarter Ending Mar-11 5 -0.06 -0.04 -0.10 -0.07
    Quarter Ending Jun-11 5 -0.07 -0.04 -0.10 -0.07
    Year Ending Dec-11 7 -0.25 -0.17 -0.31 -0.32
    LT Growth Rate (%) 1 4.00 4.00 4.00

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=DPTR.O

    Technical Analysis

    Source: http://stockcharts.com

    DPTR is trading above its 20-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

    DPTR’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility.

    The MACD for DPTR currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Feb28-2011 symbol Share, $ $ Mn 2010 2011 2010 2011

    Noble Energy Inc.

    NBL 92.66 16.28B 21.16 15.81 4.83 4.01
    Chesapeake Energy Corp. CHK 35.61 22.51B 13.04 12.36 2.08 1.74
    Denbury Resources Inc. DNR 24.22 9.68B 25.49 22.02 4.99 4.40
    Cabot Oil & Gas Corp. COG 45.66 4.75B 77.39 34.85 5.32 4.28
    Devon Energy Corp. DVN 91.35 39.55B 15.10 11.82 4.05 3.60
    Independent Oil & Gas Median 26.74 n/a 7.74 n/a
    Delta Petroleum Corp. DPTR 1.17 333.70M n/a n/a 2.96 3.18

    Source: Thomson Financial

    Source: Yahoo Finance

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