RRC - QEP: Attractive Dividend But This E&P Has Some Real Risks

• QEP is active in some of the most resource-rich basins in the United States and its production is mostly crude oil.
• The company has taken some steps to preserve its finances and should therefore generate about $100 million in FCF this year.
• It will take all of this and the cash on the balance sheet to cover its 2021 debt maturities if the market remains lukewarm to the company's debt.
• The company has even more debt maturing in 2022 and it is difficult to see how it will cover this if the market does not substantially improve in the next several months.
• The 4% yield is attractive but the risks here are too great for an investor looking for a long-term income play.

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