CIBC-Aug 4th- price target 7.25
CIBC just put out an updated report on Fairborne(FEL) on Aug 4th .current price 4.35..........12-18 month
Target price of 7.25, based on .87% of Risked NAV of $8.34.
Currently FEL trades at only .52x NAV versus Avg of its peers at .75x NAV.
2010A 2011 E 2012E
cash flow per share 1.20 1.13 1.36
Total DCAF (in Mil's) 138.4 132.1 176.0
Fairbourne(FEL) currently trades at 3.9x 2012E of DCAF of $176.0 mil
Calc.....176.mil times 3.9= 686.mil, less Debt of 230 mil= market cap of 456.mil
Shares outstanding of 102.9 mil times $4.43 per share= 456 mil Market Cap.
Average for FEL peers(covered by CIBC) is 5.5x 2012E of DCAF.............If FEL just traded at Avg of 5.5x .
.we should be trading at 176 mil times 5.5= 968mil less debt of 230 mil =net market cap of 738 mil
or $7.17 per share based on 102.9 mil shares o/s
CIBC feels the catalyst for the share price will be the two Liquids-rich plays in the Harlech/Voyageur Areas
The Cadomin well(west side of Harlech) was spud on July 22nd.The first Cardium well is expected to be spud
by late August or early September. CIBC expects results by late September. CIBC states that Tourmaline(TOU)
has had sucess in the Cadomin play drilling 2 strong wells(about 50k upstream from Fairbourne's well)
I also note on CIBC 'S chart that Tourmaline trades the highest at 1.14 x risked NAV. Only one stock trades below
FEL"S .52x Risked NAV and that is Anderson(AXL). Hopefully with the new wells being drilled in the above
referenced area, that we will see a higher movement in Share Price. GLTA