Eight Capital Q3 Preview EC CFPS estimate: $1.17
EC Prod. estimate: 69,464
Consensus CFPS estimate: $1.09
Consensus Prod. estimate: 70,666
Outlook:
We estimate that SDE generated roughly $155 million of FCF after an estimated $88 million of capex spending. While we see SDE reaching 0.0x Net Debt/CF ($48 million in Q4/22) at STRIP pricing, we do not expect to hear about a definitive shareholder return framework this year as the company wants to focus on building a cash surplus in order to allow it to be opportunistic on the M&A front and be aggressive with a buyback program in the new year. Production wise, we are expecting a soft quarter due to the timing of capex and wells being put on production. Unto this, given SDE has drilled 2 of the top ten Montney oil wells, as per geoSCOUT, along with other wells brought on production in October, we expect to see positive production momentum build towards Q4.