Here's How Much a $1000 Investment in PDC Energy Made 10 Years Ago Would Be Worth Today

2022-06-19 00:31:16 By : Ms. Vicky Zhang

For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.

What if you'd invested in PDC Energy (PDCE) ten years ago? It may not have been easy to hold on to PDCE for all that time, but if you did, how much would your investment be worth today?

PDC Energy's Business In-Depth

With that in mind, let's take a look at PDC Energy's main business drivers.

PDC Energy, Inc. is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. Headquartered in Denver, CO, the firm is focused on the Wattenberg Field in Colorado and the Delaware Basin in Texas. PDC Energy’s Wattenberg operations are centered around the Niobrara and Codell formations, while the Delaware Basin development primarily targets the Wolfcamp zones. The company, which reached its present form following the January 2020 combination with SRC Energy, is currently the second-largest producer in the Denver-Julesburg (‘DJ’) Basin behind Occidental Petroleum.

The Wattenberg Field is PDC Energy’s core operating region where it has around 1800,000 net acres. Meanwhile, in the Delaware Basin, the domestic exploration and production (E&P) entity controls approximately 25,000 net acres. During the most recent quarter, the company reported total production of 19,405 thousand barrels of oil-equivalent (MBoe), of which 16,732 MBoe per day (or some 86%) came from the Wattenberg Field and the rest from Delaware Basin.

At Dec 31, 2021, PDC Energy's total estimated proved reserves were 213,845 thousand barrels (MBbls) of oil, 240,389 MBbls of natural gas liquids (“NGL”) and 2,159,725 million cubic feet (MMcf) of natural gas, totaling 814,188 thousand barrels of oil-equivalent (MBoe) — 56% liquids, 49% developed.

PDC Energy generated revenues of $1.9 billion from its operations last year, up 39% year over year. The company — focused on growth through a combination of acquisitions and active drilling — spent around $583.1 million on oil and gas capital expenditures in 2021. The company expects to generate approximately $2.7 billion in cumulative free cash flow (at a WTI price of $75, natural gas at $4 and NGL at $27.50) this year and next, while returning $1.7 billion to its shareholders during this period. As of Dec 31, 2021, PDC Energy had approximately $33.8 million in cash and cash equivalents, and $942.1 million in long-term debt, representing a debt-to-capitalization of 24.5%.

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in PDC Energy ten years ago, you're likely feeling pretty good about your investment today.

A $1000 investment made in June 2012 would be worth $3,091.49, or a gain of 209.15%, as of June 17, 2022, according to our calculations. This return excludes dividends but includes price appreciation.

The S&P 500 rose 173.06% and the price of gold increased 9.41% over the same time frame in comparison.

Analysts are anticipating more upside for PDCE.

PDC Energy is an independent exploration and production operator with the Wattenberg Field in Colorado being its chief operating region. Following the SRC Energy deal in 2020, PDC Energy has emerged as the second-largest oil producer in the DJ Basin to go with its existing Delaware acreage. It has a favorable debt maturity profile with little in near-term due, while a disciplined approach to capital spending together with high commodity prices should boost free cash flow generation in 2022. But similar to other upstream firms, the company' sizeable exposure to the highly volatile crude prices is a continued risk factor for earnings and revenues. Asset concentration risk and an uncertain regulatory environment in Colorado are the other negatives in the PDC Energy story. Hence, investors are advised to wait for a better entry point.

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