Stifel cuts PTs of Colorado-based energy firms in anticipation of regulatory hurdles

PDC Energy

15/09/2020 12:47

** Stifel cuts PTs of Colorado-based energy firms PDC Energy
Inc  PDCE.O  and Bonanza Creek Energy Inc  BCEI.N  in
anticipation of regulatory roadblocks
    ** Last week, local media reported the Colorado Oil and Gas
Conservation Commission (COGCC) has indicated it favors
increasing the setback distance for the state's new oil and gas
wells (https://bit.ly/3hr9AI0)
    ** Under the COGCC proposal, all homes and schools in
Colorado should be protected from new oil and gas drilling by a
2,000-foot buffer vs current requirement of 500 feet
    ** "While a final vote on the decision is not expected until
next month, we are tweaking price target in anticipation of a
rule change" - Stifel
    ** Proposal comes after Colorado legislature passed Senate
Bill 181 last year, directing COGCC to prioritize public health,
safety, welfare and the environment, while regulating the oil
and gas sector (https://bit.ly/35BGMKq)
    ** Stifel cuts PT to $46 from $48 on BCEI; Lowers it to $20
from $26 on PDCE
    ** However, brokerage reiterates "buy" rating on both stocks
and says anticipated rule change has no impact on its 2020-2022
earnings estimates
    ** PDCE has shed over ~53% YTD, while BCEI has fallen ~18%

 (Reporting by Shruti Sonal in Bengaluru)
 ((Shruti.Sonal@thomsonreuters.com; Twitter: @shrutisonal26))