Surging Natty Gas Prices will boost Producers
Bonavista Energy Corp
Symbol C : BNP
Shares Issued 186,962,278
Close 2014-02-24 C$ 16.08
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Globe says surging nat gas prices good for Bonavista
2014-02-25 06:40 ET - In the News
The Globe and Mail reports in its Tuesday, Feb. 25, edition that AltaCorp Capital Research analyst Jeremy McCrea has upgraded Bonavista Energy ($16.08) to "outperform" from "sector perform." The Globe's Darcy Keith and Jody White write in the Eye On Equities column that Mr. McCrea hiked his target on the shares to $19 from $15. Mr. McCrea says surging natural gas prices should benefit Bonavista. Mr. McCrea says recent comments from Bonavista suggest investors should be much more optimistic on the company's prospects. Meanwhile, its production is weighted 63 per cent toward natural gas, and along with its natural gas liquids assets, Bonavista "has some of the highest torque to the improving commodity price environment," says Mr. McCrea. He thinks Bonavista's first quarter pricing of sales will exceed most expectations, given that it sells 55 per cent of its gas at daily prices. Mr. McCrea says: "The decline in gas prices over the past few years and the resulting increase in leverage forced management to make substantial changes and improvements to its well economics. ... The results of those efforts are now beginning to pay off and we believe the share price has only modestly reflected these changes."
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