Continuing good times aheadScotia has a target of $21.00 and, in summary, wrote:
SDE delivered solid Q1/22 results, with production, Adjusted Funds Flow (AFF), and capex in line with Street expectations. The company’s operations update featured a strong array of recent well results from the Deep Basin and Montney plays — all trending favourably compared to our type curve expectations (and all on track for payout periods less than one year). SDE confirmed its 2022 capital budget and production guidance for the time being; however, we expect to see a budget increase and shareholder returns program (likely buybacks) announced during 2H/22. We continue to see (1) debt reduction and the potential introduction of a shareholder return framework, (2) the next round of Gold Creek Montney well results, (3) initial Simonette Montney well results, and (4) possible bolt-on acquisitions as key catalysts for the stock. With consistently strong operating results, a rapidly deleveraging balance sheet, and an underappreciated high-quality asset base, SDE continues to be our top oil-weighted idea.