RE:kel metrics superior to crThese enterprise value valuation models are completely flawed with respect to E&Ps that have debt versus those that don't. We shouldn't be surprised - these are banks after all, they don't want investors to think that indebted companies are worth less.
That's because E&Ps that have a lot of debt will be diverting some of their cashflow this year and next to repay same, money that won't be spent on infrastructure, drilling and completions. Whereas Kelt will be applying 100% of cashflow to capex which means Kelt will far outgrow its indebted peers. As a result, in 2 years' time Kelt will be a lot bigger than CR or PIPE, will be approaching NVA's size (also because they have more land) and will have outpaced TVE on a per share basis. IMO.
At which point the banks will have revised their price targets which was entirely predictable from day 1. But they can't say that today - they'd be shooting themselves in the foot. They are banks after all whose core business is making money - in more ways than one - by lending it.