GREY:SCSZF - Post by User
Post by
templetoothon Mar 01, 2011 3:59pm
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Post# 18214556
Scotia coverage
Scotia coverageScotia started coverage on SCS, Arcan, Pinecrest, Equal and a few others today.
They have a 1-year target of $3.25 which I think is exceedingly modest, but then I've fallen for this story hard, hard, hard! They're predicting cash flow of 39 and 52 cents, 2011 & 2012, on production of 2730 and 3600 boe/d.
This story has all the ingredients the market eventually pays for: big land exposure, strong shareholders in Brookfield and Front Street, looks like they've found the right key to unlock the treasure chest, etc.
Selling off Provost production means to me the other dribs and drabs will be soon gone as well.
In the abbreviated Scotia report I saw, no mention of the Beaverhill farmout but they're only giving them 14 cents of credit for BH in the $3.25 target. Whether that was a good deal or not, I'm happy that in a relatively short span of let's say a year, an awful lot of acreage is either going to be condemned or coming up roses.
Realistic to expect that there will be opportunities to add to a position as the story unfolds: don't know how people are going to react to Q4 and Q1 numbers that will reflect the equipment problems at Judy Creek, and there's lots of people with higher-priced paper who might sell in exasperation. I'm tucking this one away at least until the day they hit 4000 b/d. By then, the expectations will be for 8-10 per day, if it hasn't already been taken over.