Tamarack TVE-T $3.50 to $4 Upgraded Raymond James Tamarack Energy Going to $5/Share in 2021 YES$ PetroGirl says Tamarack Valley Energy Ltd.’s (TVE-T) recent exploration in Alberta’s Clearwater oil play is not being properly recognized by the market, according to Raymond James analyst Jeremy McCrea, prompting him to upgrade his rating to “strong buy” from “outperform.” “While investors have been pushing E&P share prices higher on expectations of stronger WTI , there remains a few names that we expect to also see a multiple expansion (and not just a reversion to the mean),” he said. “Historically, where we typically see the largest multiple expansions in the sector is when a company discovers a new play/formation, especially in a resource play where there remains plenty of running room (as investors price in this future undrilled inventory).
“Recall in December, Tamarack announced two acquisitions and its entry into the Clearwater play with combined production of 2.0 mboe/d (for $90-million). On March 25, TVE closed two more acquisitions totaling 2.8 mboe/d for $135-million in the Sparky (Eyehill), Slavepoint and Clearwater plays. The standard headline figure of 3.9x FFO was ‘good’ but not ‘good enough’ to get the attention by the market given that the acquisition was announced in the middle of Q4 reporting. Combined with no GeoSCOUT production data from the wells in the acquired asset (and the company restricted from discussing details of the play), we believe the value of the acquired acreage appears to have been greatly overlooked.”
Mr. McCrea raised his target for the Calgary-based company by $1 to $3.50. The average on Street is $3.06
“TVE has potentially come across a top decile asset with years of running room based on recent and early exploration results. A few more months of data will likely confirm this, which we expect will lead TVE expanding its capex and production guidance later this year. With D/EBITDA at 0.7 times, EV/FCF yield at 19 per cent, EV/PDP at 1.4 times and a much improved profitability outlook with the Clearwater asset, we believe there’s plenty of upside not appreciated by the market yet. Given all of this we are upgrading.
Facts Are Facts Tamarack energy Producing Highest Netbacks in Canadian oilpatch $50 barrel soon in The Clearwater Basin
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