GREY:BXEFF - Post by User
Post by
yahearmeon Dec 13, 2013 9:59am
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Post# 22002653
Canaccord
Canaccord Cannacord on BXE
Bellatrix Exploration Ltd. (BXE : TSX : C$7.35) - Buy - Target:C$12.00
Closes Angle; provides additional clarity on 2014; maintaining BUY rating and C$12.00 target Investment recommendation Bellatrix provided a second look at its 2014 guidance as well as confirmed its exit rate expectation of 40,000 boe/d for 2013. The company successfully closed the acquisition of Angle Energy on December 11 and is on track to its busiest year to date in 2014. We continue to recommend Bellatrix as our top pick given its supportive valuation with significant re-rating potential, industry leading capital efficiencies forecast in 2014 given promoted JV capital spending and top quartile well results in both the Cardium and Spirit River. We have maintained our BUY rating and C$12.00 target based on 1.0x NAV and a 2014E EV/DACF multiple of 6.8 times. Investment highlights Initial 2014 guidance confirmed. The company continues to anticipate annual average and exit production of ~44,000 boe/d and ~47,000 boe/d with net capital spending of $370 million, $100 million of which will be allocated to key strategic infrastructure. Although the proposed Ferrier plant is not part of its formal budget, Bellatrix could finance the facility in a variety of ways, including term debt, the involvement of a third party for its financing or utilize its newly expanded bank line of $500 million (previously $255 million). On our estimates, it exits 2014 at only 64% bank line utilization and has ample financial flexibility. Top-notch capital efficiency is the cornerstone to growth. Bellatrix has the lowest forecast cost of adding production next year within the Intermediate peer group at ~$15,100/boepd. Valuation Bellatrix trades at a 0.6x multiple to CNAV, a 4.6x EV/DACF multiple, and $36,600 per BOEPD based on our 2014 estimates, compared to peer group averages of 0.9x NAV, 7.6x EV/DACF, and $74,800/BOEPD.