TSX:VSN.DB.B - Post by User
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retiredcfon May 08, 2014 10:31am
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CIBC
CIBC
| Veresen Inc. Q1/14 After The Call: Strong Quarter, Thesis Firmly Intact |
| We maintain our SO rating and $18.50 PT. We expect the de-risking of Veresen's $8B Jordan Cove (JC) project to result in material share price appreciation. We estimate JC is worth $4.50/sh risked, and calculate an incremental $2.50/sh from de-risking the project through to FID in 2015. Veresen expects the FERC to release the draft Environmental Impact Statement (EIS) in Q2/14. With the release of the draft EIS, the FERC will also provide a target date for issuing the final EIS. The FERC notice to proceed (a major project milestone) typically follows the final EIS. Veresen is analyzing what is the optimal ownership in the Jordan Cove project. Beyond de-risking the JC project, the most significant driver of value for Veresen is its ultimate retained interest in the project. Our valuation reflects an ownership interest between 30% and 50%. Veresen maintained its $1.09 2014 mid-point distributable cash flow per share (DCPS) guidance with a more narrow range of $0.97-$1.20 from $0.93-$1.25 despite issuing $285MM of equity in Q2/14. We estimate 2014 DCPS of $1.10. |