Analyst Update Elsewhere in the Alberta Montney, RMP Energy Inc. (RMP) added five cent to 57 cents on 267,000 shares. It too got a lovely mention from an analyst this morning, courtesy of Macquarie Research's Tom Hems. He wrote that he recently attended meetings with RMP's management and came away with a "positive outlook." RMP's management (much of which is new, as discussed most recently in the Sept. 8 Energy Summary) is currently hard at work persuading shareholders to vote in favour of the "transformational" transaction announced at the beginning of the month. The transaction involves selling the majority of RMP's producing assets to the private Tangle Creek Energy for $80-million. RMP's remaining core asset will be its Elmworth Montney project, which is producing about 1,400 barrels of oil equivalent a day from two of the four wells drilled so far. These wells have had mixed results, but that does not bother Macquarie's Mr. Hems, who wrote today that his previously "limited confidence" in Elmworth has started to rise. He noted that land sale prices in the area have been doing well, averaging about $500 per acre since the start of 2016 and recently reaching as much as $3,125 per acre near RMP's land. As well, said Mr. Hems, neighbouring wells have been putting in good showings. He pointed to a recent 1,142-barrel-a-day well drilled by Velvet Energy. (RMP's wells, for context, have tested at initial rates of 390 to 1,130 barrels a day. Those results were from three wells; the fourth was still awaiting testing as of mid-August.) "Given new management's experience drilling hundreds of wells," concluded Mr. Hems, "we feel comfortable in the ability to replicate some of these results." He upgraded RMP's stock to "outperform" from "neutral" and raised his price target to 85 cents from 65 cents.
Mr. Hems will see how his Elmworth-related predictions work out after RMP's winter drill program, which is set to include at least two new wells. Before that, however, the company will seek shareholder approval for its above-mentioned "transformational" asset sale. It recently mailed its information circular for the shareholder meeting, scheduled for Friday, Oct. 13.