RJ - Jeremy Macrea - PIPESTONE w/ outperform on update from today's notes:
PIPE has had one of the largest growth profiles over the last few years as its Montney wells delivered exceptional returns. Its land base and many top quartile wells clearly put it in the foresight as a possible take-out candidate, especially as other Montney names looked to high-grade their asset base. We think that is partially why we’ve seen so much volatility in the name since last summer as investors debate the metrics of a takeout/merger, that was unexpectedly hit with a change in corporate strategy (and some mixed exploration well results). With the company seeing the technical revisions in its reserve report now, we believe much of this information is well disseminated and reflected in the valuation. Going forward, new well results in the lower Montney look again to be quite encouraging (at potentially 850+ bbls/d), but it will take a little longer to convince new shareholders of the success. Overall, we still believe there is good risk/reward as the company builds out its Pipestone play.