Seeking Alpha: Can Penn Virginia Really Be This Cheap?

It may be a cliché, but there's something to the idea that investors ought to be cautious when a stock price seems too good to be true. I'm quite well aware of the vulnerabilities and problems of modeling net asset values for E&P companies like Penn Virginia (NYSE:PVA) (it's a pretty typical case of "garbage in, garbage out"), and I'm likewise aware that the Street doesn't like stories where the company has been missing production expectations.

Penn Virginia shares are up about 13% from the last time I wrote on the company, beating the EPX Index but lagging other notable Eagle Ford operators like EOG (NYSE:EOG), Halcon (NYSE:HK), and SM Energy (NYSE:SM). That appreciation would seem to understate the meaningful value added since then through acreage acquisitions, ongoing drilling success in the core Lower Eagle Ford, and more recent success in wells testing the Upper Eagle Ford. While another recent downward production revision hasn't helped sentiment, and neither has recent weakness in oil prices, these shares look too cheap unless you believe oil prices can't hold $90 and/or the Upper Eagle Ford won't live up to these initial hopes.

Continue reading here:
Can Penn Virginia Really Be This Cheap?

Seeking Alpha: Differentials All The Difference For Cabot Oil And Gas

There are a lot of numbers supporting an argument that Cabot Oil & Gas (COG) is one of, if not the, best dry gas producers in the country. The company has shown exceptional capital productivity, as well as low lifting and finding & development costs. Add that to some top-notch acreage in the Marcellus, and Cabot has delivered top-notch adjusted production growth and returns on employed capital.

That's not what is driving the shares right now, though. All of the positives at Cabot seem to be taking a back seat to worries that production growth in the Marcellus will overwhelm takeaway capacity and force Cabot to accept weak differentials. This is most definitely a risk, as every $0.25/mmbtu has a roughly $5 to $6 impact on NAV, but I believe growth-hungry midstream and pipeline companies will address these infrastructure challenges, leaving Cabot meaningfully undervalued today.

Read the full article here:
Differentials All The Difference For Cabot Oil And Gas