After much investor anticipation throughout 2004, the publicly traded shares of Denver-based and Rockies-focused Bill Barrett Corp. finally debuted December 10 on the New York Stock Exchange as BBG. The 13-million-share IPO priced at $25 per share, well above the initially expected range of $20 to $23, and raised $325 million. With nearly 40.4 million shares outstanding following the offering, the company has a market cap north of $1 billion. Initial Wall Street takes: the market loved the company's growth story and the franchise name of Bill Barrett; some analysts, however, felt the valuation of the shares was a bit rich. Jason B. Selch, global energy analyst for Columbia Wanger Asset Management in Chicago, is impressed with the broad spread of drilling projects the company will be participating in during the next few years. "If you invest in a Kerr-McGee or an EnCana, you get exposure to the Rockies but you have to take it with a whole bunch of other holdings," he says. "Conversely, if you invest in companies like Ultra Petroleum or Patina Oil & Gas, you're participating in very strong, but narrowly focused, projects there." What the Bill Barrett IPO brings to the market, Selch says, is a diversified investment vehicle that's focused on a variety of exploration and development projects throughout the Rockies, including tight-sands gas, coalbed methane, biogenic gas and fractured shale plays. The producer, which last September had net proved reserves of 255 billion cubic feet equivalent (Bcfe), is active in nine basins and 22 exploration projects throughout the Rockies, including both conventional and unconventional plays. Says Selch, "Any of these could turn into a company-making project." From early 2002 through September 2004, Bill Barrett Corp. participated in drilling 383 gross wells in the Rockies, 97% of them producers. Its daily production last September totaled 89 million cubic feet equivalent, a 71% increase from September 2003. Selch also likes the fact that BBG has more than 1 million net acres of undeveloped land in the Rockies. "This land has been chosen by people who have spent their careers there, so they know what they're buying and hence, the acreage has some real value." This said, the analyst believes the shares of Bill Barrett Corp. come to market at a high multiple relative to the company's proved natural gas reserves-higher than the multiple at which other E&P companies have been buying gas reserves in recent M&A transactions. "So this isn't a value play-rather it's a growth play." Dan Pratt, E&P analyst for John S. Herold Inc. in Norwalk, Connecticut, shares much the same take. His analysis indicates that even at $21.50 per share-the mid-point of BBG's original expected price range of $20 to $23-the stock would trade at a 33% premium to Herold's $16.31-per-share appraised net worth for the producer. "Based on this asset valuation, the shares appear expensive compared with a peer group," says Pratt. Also, given Herold's 2004 cash flow estimate of $2.85 per share for BBG, the stock's implied price/cash flow multiple of 7.6-based on just a $21.50-per-share price-is again higher than the comparable multiple for its peers. Rich valuations aside, Pratt views Bill Barrett Corp., debt-free after its IPO, as a seasoned drillbit-focused, growth-oriented producer with large unproven reserve potential. He notes the company has about 2,000 probable and possible drilling locations throughout the Rockies which, by his estimates, provide BBG exposure to 635 Bcfe of probable and possible reserves. Knowing Bill Barrett as an explorationist who has always swung for the fences, we wouldn't be surprised if the total net unrisked reserve potential to which BBG is exposed in the Rockies ultimately turns out to be much higher-more in the multi-trillion-cubic-foot-equivalent range. After all, this is a man-and the same management team-who built Barrett Resources during a 20-year period from a company worth 38 cents per share to one worth $73.32 per share when it was sold to The Williams Cos. in 2001 for $2.8 billion. That's likely the reason many investors have been willing to pay a perceived premium for the stock.