Seeking Alpha: Bill Barrett: High-Return Oil Plays, But Capital Needs Could Pinch

Oil and gas companies are definitely not all the same, and those differences (be they adjusted production growth, well-level ROEs, capital structures, or what have you) eventually show up in valuations. Bill Barrett (BBG), PDC Energy (PDCE), and Bonanza Creek (BCEI) are all interesting E&P companies in the $2B to $3B enterprise value range, but their performance since my October 4, 2013 piece on Bill Barrett has diverged pretty significantly - with PDCE down almost 7%, Bonanza Creek up almost 18%, and Bill Barrett up about 2%.

Looking ahead, I'm encouraged by the company's production and return potential in the DJ Basin and Uinta (or Uintah) Basin and eager to see whether initial tests in the Chalk Bluffs area will match up to the results reported by EOG (EOG) and further expand its resource potential. On the other hand, the company's capital needs are considerable and I'm concerned about the debt/balance sheet-adjusted production growth prospects.

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Bill Barrett: High-Return Oil Plays, But Capital Needs Could Pinch