Steady As She Goes.CIBC EQUITY RESEARCH
CARDINAL ENERGY LTD.
Q1/24 Results: Prudent Capital Spending Adjustments Accompany Steady Update
Our Conclusion Cardinal posted a steady Q1/24 update with production and cash flow in line with expectations. The company has lowered its conventional spending budget and reduced its abandonment spending plans but maintained its fullyear production guidance owing to strong well results in its conventional assets. We take this as a prudent move to maintain a strong balance sheet as the company progresses its SAGD project. The Reford thermal project remains on track, with full-year spending unchanged at $69MM. We have fine-tuned our model on the back of this update which sees our 2024E cash flow remain unchanged at $1.89/sh while our year-end net debt moves to $85MM from $102MM. Cardinal trades at 3.9x 2024E EV/DACF versus oilweighted peers at 3.1x.
GLTA