In today’s briefing:
- Talos Energy, Inc. – Value Creation Catalysts
- Q2 Liquidity Ranking for Crypto Assets
- Culp, Inc. – 4QFY23: Results Beat Estimates; Trends Improve in Mattress Fabrics
- Earthstone Energy, Inc – Delaware Expansion Adds Quality Inventory
Talos Energy, Inc. – Value Creation Catalysts
Talos’s current valuation implies a steep discount to net asset value (NAV).
Management estimates the company’s year- end 2022 pro forma proved reserves have a gross PV-10 value of ~$5.5 billion (~$4.8 billion net of asset retirement obligations [ARO]) based on oil and natural gas prices of $75/bbl and $3.50/Mcf.
Adjusting for March 31, 2023, balance sheet items, leaves an estimated NAV of ~$3.6 billion, or $28.38/share.
Q2 Liquidity Ranking for Crypto Assets
- Towards the end of last year, I published the first liquidity ranking system for crypto assets, comparing each asset’s liquidity ranking to its market cap and investigating which token’s market cap is the most misleading from a liquidity standpoint.
- In Q1 of this year I provided an update to the ranking system as overall market liquidity hit 10 month lows.
- The good news is that global liquidity has been more or less flat over Q2, with no further drops apart from the tokens featured in the SEC lawsuits and a handful of exchange-specific drops in liquidity, such as Binance.US.
Culp, Inc. – 4QFY23: Results Beat Estimates; Trends Improve in Mattress Fabrics
Beat expectations. After market close on June 28, Culp reported 4QFY23 results that exceeded expectations.
Total revenues were $61.4 million, beating our $54 million estimate and consensus of $55.5 million.
On the bottom line, the company’s EPS of ($0.38) beat our ($0.50) estimate and consensus of ($0.45).
Earthstone Energy, Inc – Delaware Expansion Adds Quality Inventory
Earthstone announced an agreement to acquire Novo Oil & Gas Holdings LLC for $1.5 billion on June 15, 2023.
Concurrently, Northern Oil & Gas will acquire a pro rata one-third of the assets for $500 million from Earthstone, resulting in a net purchase price of $1.0 billion.
The transaction is expected to close in 3Q23 and will have an effective date of May 1, 2023.
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