Spyglass Resources Corp SGLRF

TD Securities Downgrade - Reduce - target .60

[Analysis98]

TD Investment Conclusion
Given the recent downturn in commodity prices, and the reduced risk appetite
in the space, we believe that Spyglass is in a position to be dually affected.
First, we believe that leverage will continue to be a concern, and the current
market for asset sales is more challenging than it had been YTD. As a result,
we believe that it will be challenging for the company to generate sufficient
disposition proceeds to meaningfully lower debt. Second, we do not believe
that Spyglass will be able to maintain production (and dividends) while
spending cash flow in 2015, as implied by our payout ratio of 153%. Finally,
we have reduced our estimates for 2015, resulting in a reduction to our target
price to $0.60 (from $1.25). Based in a -19% total return to target, we are
moving to a REDUCE recommendation (from Hold).