Scotia take on Q3 numbersEvent¦ Equal announced Q3/11 results.Implications¦ Results in line. CFPS of
.50 was in line with our estimate of
.52. In addition, production of 11,263 boe/d (52% oil/NGL's) was in line with our expectation. We anticipate the company's 2012 guidance (production, capex, and cash flow) to be released after the closing of non-core asset sales (previously announced) and is likely in the next few weeks. Our 2012 production estimate is ~9,600 boe/d based on a cash flow budget.¦ Mississippian a free option. Equal holds 19,800 boe/d (56% held by production) in Grant and Alfalfa counties in Oklahoma. Offsetting acreage is held by Chesapeake, SandRidge, and Eagle Energy (private). The company is currently evaluating all options to develop and may monetize (sell, farm-out, JV), which we view as a catalyst for the stock. We have not included any value related to the company's Mississippian acreage in our target price buildup.Recommendation¦ We maintain our 2-Sector Perform rating and our one-year target price of $8/share.