canaccord tgt $10 RMP Energy Inc. (RMP : TSX : C$7.67) - Buy - Target:C$10.00 Deja vu; another production bump on the horizon; maintain BUY and C$10.00 target Investment recommendation RMP reported Q2 results yesterday after market close that were slightly ahead of expectation, as CFPS came in 2 cents higher than consensus, while production had been pre-released. Accompanying the financials RMP announced an increase in its 2014 capital budget on the back of accelerated drilling due to favourable break-up conditions. More importantly however, RMP also announced that it is going ahead with expanding its infrastructure at Ante Creek. The added infrastructure will double processing capacity in the area, taking field capacity from ~7,500 boe/d today, by our estimation, to close to 15,000 boe/d. As a result, we have bumped our 2015 production estimates by ~10%. We continue to rate RMP a BUY with a C$10.00 target, which is NAV based and maps to 6.0x 2015E EV/DACF. Investment highlights Production pre-announced. RMP reported Q2 production of 12,437 boe/d which was in line with the company's pre-released figure of 12,400 boe/d. This represents a 35% increase from Q1/14 and an 82% increase from Q2/13. Cash flow beat. In Q2 RMP generated cash flow of $48.4 million, or CFPS of $0.38, which was 2 cents higher than our estimate and consensus. This was largely driven by lower opex and G&A, as expanded volumes lowered unit costs (Exhibit 1). Capex. Spending for the quarter totaled ~$22 million, which was higher than our estimate of $10 million due to favourable spring break-up field conditions which allowed the company to advance its Q3 drilling program.