David Pescod on Vero today... First Energy Capital out of Calgary puts out a very interesting
morning comment called First Summary as they look at
stories that they follow and find interesting.
Over the last week, they’ve written up reports on two juniors
that if a person had any confidence at all that the oil and
gas sector might return to some sort of normality, are stories
that would attract interest.
One is Vero Energy
and again you see a chart that has been
kind of ugly, but Vero has sold much of their natural gas assets
to concentrate on junior oil and the team at Vero led by
Doug Bartole, is well thought of., is well thought of.
First Energy’s Robert Fitzmartyn writes this on Vero Energy:
“Vero reported second quarter results that were in line
to slightly behind our expectations, although capture the full
transition of the Company to a relatively pure-play light oil
growth vehicle with cash netbacks of $32.17/boe.
Realistically, on a renewed, focused platform of light oil
Cardium development supported by a much cleaner balance
sheet, the outlook over the remainder of 2012e continues to
be fairly straightforward. Vero has reiterated its outlook for
2,500-2,700 boe/d for 2Q/3Q/4Q 2012e albeit is likely to be on
the lower end of this range given a late start to drilling this
summer. We are already on the low end of the range so come
out of this release with no material changes to our estimates.
We continue to identify very strong levels of capital appreciation
from here relative to our 12-month target price of $3.65
per share, itself predicated on a far from onerous 5.0x 2013e
EV/DACF multiple, and noting that its ~40% hedged for the
remainder of 2012e at some very attractive prices, would reiterate out Outperform ranking at this juncture."