Aeris Environmental Ltd T.AEI

RE: RE: upgrade?

[firestarterm]

Analyst is Kevin Shaw of Wellington West Capital Markets Inc. Jan 29th  I know its mail out to their clients.  Here is snippet:

• Replacing 137% of 2P reserves sold & produced w/ rise to 8.7 mmboe

Despite non-core asset sale of 1.0+ mmboe & light capex in ‘09 transition

year, AEI grew reserves & increased 2P oil weighting to 85% from 70%.

• Shift in focus to LIGHT oil evident in 2P breakdown; NAV ? by 18%

Light oil % of 2P reserves rose to 74% from 49% due to sale of heavy oil

& gas assets & primary focus on Evi & Bakken/Three Forks development.

• RLI ~12 yrs on 2P (~8 yrs 1P); growth engine “firing” on key plays

Resource plays in N. Dakota for Bakken / Three Forks, & Princess hztl

project, among others, position AEI to continue to grow 2P bookings y/y.

• Raising target price to $1.65 from $1.45 as reserves top our estimates

We have de-risked our 2P reserves value as ‘09 reserves of ~8.7 mmboe

beat our 8.3 mmboe est., raising our ‘10E NAVPS to $1.92 from $1.49.



                      

                        Old New

Target Price $1.45 $1.65