Post by
righand2 on Dec 30, 2014 11:22pm
RBC target $6
Kicking Horse Energy Inc. (KCK), in its third day of trading, rose as high as $3.50 before settling down 10 cents to $3 on 18,800 shares. The company got a nice mention yesterday from RBC Capital Markets analyst Shailender Randhawa, who started coverage of the "overlooked" stock and set a price target of $6. Kicking Horse listed last week following the merger of Contact Exploration Inc. and Donnycreek Energy Inc. Each Contact shareholder received 0.075 of a Kicking Horse share for each Contact share, and each Donnycreek shareholder received 0.6 of a Kicking Horse share for each Donnycreek share. The former Donnycreek shareholders now hold about 56 per cent of Kicking Horse's 59.7 million shares. Donnycreek and Contact, along with Questerre Energy Corp. (QEC: $0.39), were part of a 50-25-25 joint venture at the East Kakwa property in the Alberta Montney, an area dominated by companies such as Seven Generations Energy Ltd. (VII: $17.14), Paramount Resources Ltd. (POU: $28.20) and Tourmaline Oil Corp. (TOU: $38.64), as the trio of juniors never hesitated to point out. Interestingly, Clay Riddell, who is a director of Paramount and Tourmaline, was also the largest shareholder of Contact. He held over 31 million of its 284 million shares as of Sept. 3 and was thus considered an insider. On Nov. 7, after Contact completed a private placement and issued 62 million more shares, Mr. Riddell's ownership appeared to drop below the insider threshold and he stopped having to file SEDI reports. Assuming he did not sell any shares of Contact, he would now hold 2.3 million shares of Kicking Horse. By comparison, president and CEO Steve Harding -- formerly the same at Contact -- holds 268,125. The Kakwa joint venture property is currently producing about 4,000 gross barrels of oil equivalent a day. Now that Donnycreek and Contact have merged, Kicking Horse has a 75-per-cent interest in the property and is producing around 3,000 barrels a day. It will focus mainly on this and neighbouring areas of the Alberta Montney. Its other assets, which are in Atlantic Canada, are still years away from significance. (These assets include oil and gas properties in New Brunswick and an 11.45-per-cent interest in Pieridae Energy, which hopes to build a Nova Scotian liquefied natural gas (LNG) plant that will not open until 2020 at least -- more on Pieridae later.) The Montney should be more than enough to keep Kicking Horse occupied. Net production is expected to rise to 4,500 barrels a day in 2015 from 3,000 now