Intrinsic value of PDC Energy - PDCE

Previous Close

$61.06

  Intrinsic Value

$9.50

stock screener

  Rating & Target

str. sell

-84%

Previous close

$61.06

 
Intrinsic value

$9.50

 
Up/down potential

-84%

 
Rating

str. sell

We calculate the intrinsic value of PDCE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  1,475
  2,279
  3,409
  4,946
  6,978
  9,592
  12,876
  16,907
  21,755
  27,478
  34,122
  41,717
  50,283
  59,827
  70,346
  81,830
  94,261
  107,620
  121,885
  137,035
  153,050
  169,913
  187,612
  206,138
  225,488
  245,666
  266,679
  288,542
  311,275
  334,902
Variable operating expenses, $m
  1,449
  2,238
  3,347
  4,857
  6,852
  9,420
  12,644
  16,603
  21,363
  26,984
  33,508
  40,966
  49,378
  58,750
  69,080
  80,357
  92,564
  105,683
  119,691
  134,568
  150,295
  166,855
  184,235
  202,427
  221,429
  241,244
  261,879
  283,348
  305,672
  328,874
Fixed operating expenses, $m
  308
  314
  321
  328
  336
  343
  351
  358
  366
  374
  382
  391
  399
  408
  417
  426
  436
  445
  455
  465
  475
  486
  497
  507
  519
  530
  542
  554
  566
  578
Total operating expenses, $m
  1,757
  2,552
  3,668
  5,185
  7,188
  9,763
  12,995
  16,961
  21,729
  27,358
  33,890
  41,357
  49,777
  59,158
  69,497
  80,783
  93,000
  106,128
  120,146
  135,033
  150,770
  167,341
  184,732
  202,934
  221,948
  241,774
  262,421
  283,902
  306,238
  329,452
Operating income, $m
  -281
  -273
  -260
  -239
  -210
  -170
  -119
  -54
  25
  120
  232
  360
  506
  669
  849
  1,047
  1,261
  1,492
  1,739
  2,001
  2,280
  2,573
  2,880
  3,203
  3,540
  3,892
  4,259
  4,640
  5,037
  5,450
EBITDA, $m
  359
  716
  1,219
  1,907
  2,818
  3,992
  5,468
  7,282
  9,465
  12,043
  15,037
  18,461
  22,324
  26,628
  31,372
  36,552
  42,161
  48,188
  54,625
  61,461
  68,688
  76,298
  84,285
  92,646
  101,379
  110,486
  119,971
  129,839
  140,099
  150,764
Interest expense (income), $m
  43
  83
  165
  285
  454
  683
  986
  1,376
  1,866
  2,467
  3,190
  4,044
  5,035
  6,168
  7,446
  8,870
  10,439
  12,152
  14,006
  15,999
  18,127
  20,386
  22,775
  25,291
  27,931
  30,694
  33,581
  36,591
  39,725
  42,986
  46,377
Earnings before tax, $m
  -364
  -439
  -545
  -693
  -893
  -1,156
  -1,495
  -1,920
  -2,442
  -3,070
  -3,812
  -4,675
  -5,662
  -6,777
  -8,021
  -9,392
  -10,891
  -12,514
  -14,260
  -16,125
  -18,107
  -20,203
  -22,410
  -24,728
  -27,154
  -29,689
  -32,332
  -35,085
  -37,949
  -40,927
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -364
  -439
  -545
  -693
  -893
  -1,156
  -1,495
  -1,920
  -2,442
  -3,070
  -3,812
  -4,675
  -5,662
  -6,777
  -8,021
  -9,392
  -10,891
  -12,514
  -14,260
  -16,125
  -18,107
  -20,203
  -22,410
  -24,728
  -27,154
  -29,689
  -32,332
  -35,085
  -37,949
  -40,927

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  7,058
  10,905
  16,309
  23,663
  33,385
  45,897
  61,607
  80,894
  104,091
  131,476
  163,263
  199,604
  240,590
  286,255
  336,585
  391,529
  451,009
  514,928
  583,183
  655,670
  732,297
  812,982
  897,664
  986,305
  1,078,891
  1,175,434
  1,275,976
  1,380,584
  1,489,352
  1,602,402
Adjusted assets (=assets-cash), $m
  7,058
  10,905
  16,309
  23,663
  33,385
  45,897
  61,607
  80,894
  104,091
  131,476
  163,263
  199,604
  240,590
  286,255
  336,585
  391,529
  451,009
  514,928
  583,183
  655,670
  732,297
  812,982
  897,664
  986,305
  1,078,891
  1,175,434
  1,275,976
  1,380,584
  1,489,352
  1,602,402
Revenue / Adjusted assets
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
Average production assets, $m
  6,401
  9,889
  14,790
  21,459
  30,275
  41,622
  55,869
  73,359
  94,395
  119,229
  148,055
  181,011
  218,180
  259,591
  305,233
  355,059
  408,998
  466,963
  528,860
  594,595
  664,084
  737,253
  814,047
  894,431
  978,393
  1,065,944
  1,157,120
  1,251,984
  1,350,620
  1,453,140
Working capital, $m
  -240
  -372
  -556
  -806
  -1,137
  -1,564
  -2,099
  -2,756
  -3,546
  -4,479
  -5,562
  -6,800
  -8,196
  -9,752
  -11,466
  -13,338
  -15,365
  -17,542
  -19,867
  -22,337
  -24,947
  -27,696
  -30,581
  -33,600
  -36,755
  -40,044
  -43,469
  -47,032
  -50,738
  -54,589
Total debt, $m
  2,296
  3,962
  6,302
  9,486
  13,696
  19,113
  25,916
  34,267
  44,311
  56,169
  69,933
  85,669
  103,416
  123,188
  144,981
  168,772
  194,527
  222,204
  251,758
  283,145
  316,325
  351,261
  387,928
  426,310
  466,400
  508,203
  551,738
  597,033
  644,129
  693,080
Total liabilities, $m
  3,056
  4,722
  7,062
  10,246
  14,456
  19,873
  26,676
  35,027
  45,071
  56,929
  70,693
  86,429
  104,176
  123,948
  145,741
  169,532
  195,287
  222,964
  252,518
  283,905
  317,085
  352,021
  388,688
  427,070
  467,160
  508,963
  552,498
  597,793
  644,889
  693,840
Total equity, $m
  4,002
  6,183
  9,247
  13,417
  18,929
  26,024
  34,931
  45,867
  59,020
  74,547
  92,570
  113,176
  136,415
  162,307
  190,844
  221,997
  255,722
  291,964
  330,665
  371,765
  415,212
  460,961
  508,975
  559,235
  611,731
  666,471
  723,479
  782,791
  844,463
  908,562
Total liabilities and equity, $m
  7,058
  10,905
  16,309
  23,663
  33,385
  45,897
  61,607
  80,894
  104,091
  131,476
  163,263
  199,605
  240,591
  286,255
  336,585
  391,529
  451,009
  514,928
  583,183
  655,670
  732,297
  812,982
  897,663
  986,305
  1,078,891
  1,175,434
  1,275,977
  1,380,584
  1,489,352
  1,602,402
Debt-to-equity ratio
  0.570
  0.640
  0.680
  0.710
  0.720
  0.730
  0.740
  0.750
  0.750
  0.750
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
Adjusted equity ratio
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567
  0.567

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -364
  -439
  -545
  -693
  -893
  -1,156
  -1,495
  -1,920
  -2,442
  -3,070
  -3,812
  -4,675
  -5,662
  -6,777
  -8,021
  -9,392
  -10,891
  -12,514
  -14,260
  -16,125
  -18,107
  -20,203
  -22,410
  -24,728
  -27,154
  -29,689
  -32,332
  -35,085
  -37,949
  -40,927
Depreciation, amort., depletion, $m
  640
  989
  1,479
  2,146
  3,028
  4,162
  5,587
  7,336
  9,440
  11,923
  14,806
  18,101
  21,818
  25,959
  30,523
  35,506
  40,900
  46,696
  52,886
  59,460
  66,408
  73,725
  81,405
  89,443
  97,839
  106,594
  115,712
  125,198
  135,062
  145,314
Funds from operations, $m
  276
  550
  934
  1,453
  2,135
  3,006
  4,092
  5,416
  6,998
  8,853
  10,993
  13,426
  16,155
  19,182
  22,503
  26,114
  30,009
  34,182
  38,626
  43,334
  48,301
  53,523
  58,994
  64,715
  70,685
  76,906
  83,380
  90,113
  97,113
  104,387
Change in working capital, $m
  -90
  -131
  -184
  -251
  -331
  -426
  -535
  -657
  -790
  -933
  -1,083
  -1,238
  -1,396
  -1,556
  -1,715
  -1,872
  -2,026
  -2,178
  -2,325
  -2,469
  -2,610
  -2,749
  -2,885
  -3,020
  -3,154
  -3,289
  -3,425
  -3,564
  -3,705
  -3,851
Cash from operations, $m
  366
  681
  1,118
  1,703
  2,466
  3,432
  4,627
  6,073
  7,788
  9,786
  12,076
  14,664
  17,552
  20,737
  24,217
  27,986
  32,035
  36,360
  40,951
  45,804
  50,912
  56,271
  61,879
  67,735
  73,839
  80,195
  86,805
  93,677
  100,818
  108,238
Maintenance CAPEX, $m
  -400
  -640
  -989
  -1,479
  -2,146
  -3,028
  -4,162
  -5,587
  -7,336
  -9,440
  -11,923
  -14,806
  -18,101
  -21,818
  -25,959
  -30,523
  -35,506
  -40,900
  -46,696
  -52,886
  -59,460
  -66,408
  -73,725
  -81,405
  -89,443
  -97,839
  -106,594
  -115,712
  -125,198
  -135,062
New CAPEX, $m
  -2,402
  -3,488
  -4,900
  -6,669
  -8,817
  -11,346
  -14,247
  -17,490
  -21,036
  -24,834
  -28,826
  -32,956
  -37,168
  -41,411
  -45,642
  -49,826
  -53,939
  -57,965
  -61,897
  -65,736
  -69,489
  -73,169
  -76,794
  -80,384
  -83,962
  -87,551
  -91,177
  -94,863
  -98,636
  -102,520
Cash from investing activities, $m
  -2,802
  -4,128
  -5,889
  -8,148
  -10,963
  -14,374
  -18,409
  -23,077
  -28,372
  -34,274
  -40,749
  -47,762
  -55,269
  -63,229
  -71,601
  -80,349
  -89,445
  -98,865
  -108,593
  -118,622
  -128,949
  -139,577
  -150,519
  -161,789
  -173,405
  -185,390
  -197,771
  -210,575
  -223,834
  -237,582
Free cash flow, $m
  -2,435
  -3,447
  -4,771
  -6,445
  -8,497
  -10,942
  -13,782
  -17,004
  -20,584
  -24,487
  -28,673
  -33,098
  -37,718
  -42,492
  -47,384
  -52,364
  -57,410
  -62,505
  -67,642
  -72,818
  -78,036
  -83,306
  -88,640
  -94,054
  -99,565
  -105,196
  -110,966
  -116,898
  -123,017
  -129,344
Issuance/(repayment) of debt, $m
  1,144
  1,666
  2,340
  3,184
  4,210
  5,418
  6,803
  8,351
  10,044
  11,857
  13,764
  15,736
  17,747
  19,773
  21,793
  23,791
  25,755
  27,677
  29,554
  31,387
  33,179
  34,937
  36,667
  38,381
  40,090
  41,803
  43,535
  45,295
  47,097
  48,951
Issuance/(repurchase) of shares, $m
  1,858
  2,620
  3,609
  4,863
  6,405
  8,251
  10,403
  12,856
  15,594
  18,597
  21,836
  25,281
  28,902
  32,669
  36,558
  40,545
  44,616
  48,756
  52,960
  57,226
  61,554
  65,951
  70,425
  74,987
  79,650
  84,429
  89,339
  94,397
  99,621
  105,027
Cash from financing (excl. dividends), $m  
  3,002
  4,286
  5,949
  8,047
  10,615
  13,669
  17,206
  21,207
  25,638
  30,454
  35,600
  41,017
  46,649
  52,442
  58,351
  64,336
  70,371
  76,433
  82,514
  88,613
  94,733
  100,888
  107,092
  113,368
  119,740
  126,232
  132,874
  139,692
  146,718
  153,978
Total cash flow (excl. dividends), $m
  567
  838
  1,177
  1,603
  2,118
  2,726
  3,423
  4,203
  5,055
  5,967
  6,926
  7,919
  8,931
  9,950
  10,967
  11,972
  12,961
  13,928
  14,873
  15,795
  16,697
  17,581
  18,452
  19,315
  20,175
  21,037
  21,908
  22,794
  23,701
  24,634
Retained Cash Flow (-), $m
  -1,858
  -2,620
  -3,609
  -4,863
  -6,405
  -8,251
  -10,403
  -12,856
  -15,594
  -18,597
  -21,836
  -25,281
  -28,902
  -32,669
  -36,558
  -40,545
  -44,616
  -48,756
  -52,960
  -57,226
  -61,554
  -65,951
  -70,425
  -74,987
  -79,650
  -84,429
  -89,339
  -94,397
  -99,621
  -105,027
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  19
  31
  48
  72
  104
  147
  201
  270
  355
  457
  577
  717
  876
  1,056
  1,256
  1,477
  1,718
  1,979
  2,260
  2,560
  2,878
  3,214
  3,568
  3,940
  4,329
  4,735
  5,159
  5,600
  6,059
  6,537
Cash available for distribution, $m
  -1,291
  -1,782
  -2,432
  -3,260
  -4,287
  -5,524
  -6,979
  -8,653
  -10,540
  -12,630
  -14,909
  -17,362
  -19,971
  -22,719
  -25,591
  -28,573
  -31,655
  -34,828
  -38,088
  -41,430
  -44,857
  -48,370
  -51,973
  -55,672
  -59,476
  -63,392
  -67,431
  -71,603
  -75,920
  -80,393
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -1,238
  -1,631
  -2,116
  -2,685
  -3,323
  -4,009
  -4,715
  -5,408
  -6,055
  -6,621
  -7,080
  -7,409
  -7,593
  -7,627
  -7,513
  -7,261
  -6,888
  -6,414
  -5,864
  -5,265
  -4,640
  -4,013
  -3,406
  -2,835
  -2,314
  -1,849
  -1,447
  -1,108
  -829
  -605
Current shareholders' claim on cash, %
  68.4
  48.6
  35.7
  26.9
  20.7
  16.3
  13.1
  10.6
  8.8
  7.3
  6.2
  5.3
  4.6
  4.0
  3.5
  3.1
  2.7
  2.4
  2.2
  2.0
  1.8
  1.6
  1.5
  1.4
  1.3
  1.2
  1.1
  1.0
  0.9
  0.9

PDC Energy, Inc. is an independent exploration and production company. The Company produces, develops, acquires and explores for crude oil, natural gas and natural gas liquids (NGLs) with operations in the Wattenberg Field in Colorado and the Utica Shale in southeastern Ohio. The Company operates through two segments: Oil and Gas Exploration and Production, and Gas Marketing. The Company's Oil and Gas Exploration and Production segment includes all of its crude oil and natural gas properties. The Company's Gas Marketing segment purchases, aggregates and resells natural gas. The Company's operations in the Wattenberg Field are focused on the horizontal Niobrara and Codell plays. Its Delaware Basin operations are focused in the Wolfcamp zones and its Ohio operations are focused in the Utica Shale play. As of December 31, 2016, the Company owned an interest in approximately 2,900 productive gross wells.

FINANCIAL RATIOS  of  PDC Energy (PDCE)

Valuation Ratios
P/E Ratio -16.3
Price to Sales 10.5
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 8.3
Price to Free Cash Flow -3.9
Growth Rates
Sales Growth Rate -35.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 150.2%
Cap. Spend. - 3 Yr. Gr. Rate 30.8%
Financial Strength
Quick Ratio 244
Current Ratio 0
LT Debt to Equity 39.8%
Total Debt to Equity 39.9%
Interest Coverage -8
Management Effectiveness
Return On Assets -6.4%
Ret/ On Assets - 3 Yr. Avg. 0.1%
Return On Total Capital -8.8%
Ret/ On T. Cap. - 3 Yr. Avg. -1.1%
Return On Equity -12.6%
Return On Equity - 3 Yr. Avg. -1.2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 89.3%
Gross Margin - 3 Yr. Avg. 88.7%
EBITDA Margin 17.5%
EBITDA Margin - 3 Yr. Avg. 36%
Operating Margin -86.7%
Oper. Margin - 3 Yr. Avg. -23.8%
Pre-Tax Margin -102.6%
Pre-Tax Margin - 3 Yr. Avg. -33.3%
Net Profit Margin -64.2%
Net Profit Margin - 3 Yr. Avg. -19.2%
Effective Tax Rate 37.4%
Eff/ Tax Rate - 3 Yr. Avg. 37.8%
Payout Ratio 0%

PDCE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PDCE stock intrinsic value calculation we used $922 million for the last fiscal year's total revenue generated by PDC Energy. The default revenue input number comes from 2017 income statement of PDC Energy. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PDCE stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for PDCE is calculated based on our internal credit rating of PDC Energy, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of PDC Energy.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PDCE stock the variable cost ratio is equal to 98.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $301 million in the base year in the intrinsic value calculation for PDCE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7.2% for PDC Energy.

Corporate tax rate of 27% is the nominal tax rate for PDC Energy. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PDCE stock is equal to 2.1%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PDCE are equal to 433.9%.

Life of production assets of 10 years is the average useful life of capital assets used in PDC Energy operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PDCE is equal to -16.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2508 million for PDC Energy - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 66 million for PDC Energy is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of PDC Energy at the current share price and the inputted number of shares is $4.0 billion.

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COMPANY NEWS

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▶ Data dive: A look at CEO-worker pay ratios at Colorado public companies   [Jul-02-18 07:30AM  American City Business Journals]
▶ PDC Energy: 1Q Earnings Snapshot   [May-02-18 06:01PM  Associated Press]
▶ An E&P Pair Trade Idea From Goldman Sachs   [Apr-15-18 04:59PM  Benzinga]
▶ PDC Energy Incs (NASDAQ:PDCE) Path To Profitability   [Apr-11-18 06:39PM  Simply Wall St.]
▶ PDC Energy Inc to Host Earnings Call   [Feb-27-18 09:45AM  ACCESSWIRE]
▶ PDC Energy tops 4Q profit forecasts   [Feb-26-18 05:30PM  Associated Press]
▶ Should You Buy PDC Energy Inc (NASDAQ:PDCE)?   [07:13AM  Simply Wall St.]
▶ PDC Energys Performance: What Happened to the Stock in 2017?   [Jan-17-18 10:31AM  Market Realist]
▶ US Gasoline Inventories: More Concerns for Oil in 2018?   [Jan-11-18 10:35AM  Market Realist]
▶ Will US Crude Oil Production Undermine Crude Oil Futures?   [Jan-05-18 08:17AM  Market Realist]
▶ PDC Energy Appoints New Chief Financial Officer   [Jan-04-18 09:00AM  GlobeNewswire]
▶ Investment Banks Estimates for Crude Oil Prices in 2018   [Jan-03-18 11:00AM  Market Realist]
▶ Will US Crude Oil Futures Test a 3-Year High?   [Jan-02-18 10:56AM  Market Realist]
▶ US Crude Oil Inventories Have Fallen ~10.6% in 2017   [Dec-29-17 05:20PM  Market Realist]
▶ PDC Energy Announces New Director Appointment   [Dec-21-17 12:48PM  GlobeNewswire]
▶ Global Crude Oil Supply Outage Is near 2012 Low   [Dec-20-17 10:00AM  Market Realist]
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▶ Will OPECs Meeting Disappoint Crude Oil Traders?   [Nov-29-17 11:00AM  Market Realist]
▶ Crude Oil Futures: What Could Drive Volatility This Week?   [Nov-27-17 09:57AM  Market Realist]
▶ How US Distillate Inventory Levels Affect Oil Prices   [Nov-23-17 03:15PM  Market Realist]
▶ Stocks Already Have the Holiday Spirit   [Nov-22-17 09:15AM  Zacks]
▶ US Crude Oil Production Could Hit a Record   [Nov-21-17 08:34AM  Market Realist]
▶ Which Energy Stocks Underperformed Weak Oil Last Week?   [Nov-20-17 05:55PM  Market Realist]
▶ Will US Gasoline Demand Help Oil Bulls or Bears?   [Nov-15-17 08:15AM  Market Realist]
▶ PDC Energy Announces Pricing of 5.75% Senior Notes Offering   [Nov-14-17 05:15PM  GlobeNewswire]
▶ PDC Energy -- Moody's upgrades PDC Energy to Ba3   [Nov-13-17 12:59PM  Moody's]
▶ PDC Energy reports 3Q loss   [06:05AM  Associated Press]
▶ PDC Energy settles federal, state lawsuit over oil and gas pollution in Colorado   [Oct-31-17 04:05PM  American City Business Journals]
▶ Saudi Arabia and Russia Are Impacting Crude Oil Prices   [Oct-26-17 10:49AM  Market Realist]
▶ Is US Gasoline Demand Impacting Crude Oil Prices?   [Oct-25-17 10:02AM  Market Realist]
▶ Oil Bears Track OECDs Crude Oil Inventories   [Oct-24-17 09:20AM  Market Realist]
▶ Why US Crude Oil Production Hit a 5-Week Low   [Oct-13-17 03:25PM  Market Realist]
▶ What Dennis Gartman Thinks about Crude Oil Prices   [Oct-11-17 02:07PM  Market Realist]
▶ ETFs with exposure to PDC Energy, Inc. : October 6, 2017   [Oct-06-17 11:00AM  Capital Cube]
▶ US Gasoline Demand: Are the Crude Oil Bears Taking Control?   [Oct-04-17 12:46PM  Market Realist]
▶ Is the US Crude Oil Bull Market Sustainable?   [Oct-02-17 01:06PM  Market Realist]
▶ What US Crude Oil Productions 26-Month High Could Mean   [Sep-28-17 12:36PM  Market Realist]
▶ Will the EIAs Gasoline Inventories Surprise Traders?   [Sep-27-17 12:38PM  Market Realist]
▶ How President Trump Could Impact Irans Crude Oil Production   [Sep-26-17 01:08PM  Market Realist]
▶ Denver oil and gas company consolidates its holdings in DJ Basin   [Sep-25-17 07:05PM  American City Business Journals]
▶ Iraq Could Extend the Output Cut Deal to December 2018   [Sep-20-17 01:36PM  Market Realist]
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