BMO Initiate Coverage BMO Nesbitt Burns analyst Jeremy McCrea reinstated coverage of two Canadian energy companies on Tuesday:
* Lycos Energy Inc. (LCX-X) with an “outperform” rating and $5 target. The average on the Street is $6.16.
“The most important attribute for an E&P company is its ability to ‘create value’ long term — especially on a full-cycle basis,” he said. “Although Lycos is a relatively new entity, it is at the forefront in developing new drilling concepts that have the potential to materially change well economics and go-forward profitability in shallow heavier oil basins. With a seasoned management team and another round of encouraging well results, we think it’s only a matter of time before the high profitable growth catches the attention of the institutional investor community.”