Canaccord Genuity Maintains Hold On Goodrich Petroleum On Fundraising
Canaccord Genuity analyst Stephen Berman maintained a Hold rating on Goodrich Petroleum Corporation (NYSE:GDP) with a $3.50 price target, following the news that GDP has entered into a definitive agreement to sell $100 million of second-lien senior secured notes to repay borrowings under its first-lien credit facility. Subsequently, GDP announced it was issuing 12M common shares priced at $4.15/share.
Berman noted, “While financial leverage is uncomfortably high, liquidity will be helped by the recently announced second-lien note transaction and sale of common stock. We estimate this will raise net proceeds of ~$47M, which will be used to repay borrowings under the credit facility (which had $187M drawn as of February 27, 2015) and for general corporate purposes. At YE14, GDP had $109M of liquidity ($121M drawn on the $230M revolver). Pro forma for the reduced borrowing base, second-lien transaction, and equity raise, liquidity is ~$115M. GDP will also have the ability to issue another $75M of the second-lien notes in the future without a further reduction in the borrowing base. Liquidity could be further enhanced by the sale of the Eagle Ford assets and/or a TMS JV, but these are more likely to happen in an improved oil price environment.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Stephen Berman has a total average return of -16.3% and a 31.9% success rate. Berman has a -52.7% average return when recommending GDP, and is ranked #3480 out of 3497 analysts.