Twin Butte Energy Ltd TBTEF

National Bank lkes it

[Diesel44]

Twin Butte Energy Ltd. – TBE (TSX) $2.05

Primate volumes stabilize; we have more comfort in the revised outlook

Target: $3.25 (Unchanged)

Stock Rating: Outperform (Unchanged)

Risk Rating: Above Average (Unchanged)

Est. Total Return: 68%

Event:

TBE releases year-end reserves and provides an operations update.

 

Key Takeaways:

Overall TBE’s update should reassure investors of the sustainability of the go-forward model. Despite some challenges entering the year (wider heavy oil differentials and operational issues at Primate), revised guidance in late January was a prudent move by management. We expect the shares to find a floor at current levels. At this time we believe an ~9.5% yield appropriately prices in the risk at Primate and we see potential for yield compression following additional disclosure on production.