Eight CapitalGiven targets from Scotiabank and National Bank, not sure about the "only analyst" covering the company but here you go. GLTA
Eight Capital analyst Phil Skolnick sees Logan Energy Corp. as “a highly differentiated company by virtue of its ability to generate significant growth and get rewarded for it.”
In a research report released Wednesday titled An Eruption of Growth, he initiated coverage of the Calgary-based company, which began trading on the Venture Exchange on July 18, with a “buy” recommendation.
“The company is targeting organic growth of over four times to about 20 MBOE/d [thousand barrels of oil equivalent per day] in less than five years,” said Mr. Skolnick. “The key is that there has been little to no capital deployed on LGN’s asset base as SDE was largely focused on the development of its oil-weighted Montney assets. We estimate that LGN has the inventory and wherewithal to generate 40-50-per-cent average annual production growth with liquids weighting to grow from the current 24 per cent. This is supported by over 500 identified drilling locations that lie across 193,000 net acres of liquid-rich natural gas Montney lands held at an average 95-per-cent w.i. The company also has a 50-per-cent w.i. in the 120 MMcf/d 13-11 Simonette gas plant, which has 80 per cent of unutilized capacity, all of which is available to LGN.
“We see upside potential in the guidance as LGN is not accounting for improvements from more modern drilling & completion techniques. The company’s near-term guidance assumes conservative cost and well performance ... Testing more modern completion techniques should yield increased production growth expectations, in our view. To that end, even when using a blend of modern and legacy type curves, we are almost 15 per cent and 10 per cent above consensus 2024 and 2025 estimated production, respectively.”
Believing Logan has the balance sheet strength to “provide top-tier per share growth” and expressing confidence in its management’s “ability to deliver,” the analyst thinks Logan will eventually will sell itself to a larger peer.
“But the fundamentals speak for themselves, and therefore, we support owning the stock,” he said.
Currently the lone analyst covering the stock, Mr. Skolnick set a target of $2.20, representing 203-per-cent upside to Tuesday’s closing price.