RE:TDThanks. Scotia issued a similar report with a $1.85 target. The next year should be an eventful ride. No dividends, but it's okay to occasionally have a flyer......
Q2/24 Results Largely In Line; Several Important Wells on the Horizon
OUR TAKE: Neutral. LGN’s Q2/24 results were largely in line, with moderately higher opex due to a turnaround at the Simonette gas plant. Importantly, the company reiterated its full year production and opex guidance, pointing to a strong second half. The company also announced the promotion of COO Brendan Paton to the role of president and a 50% increase to its bank line (now $75M). Looking ahead, we see the four TILs in Simonette and Lator as key catalysts for 2H/24. We continue to see LGN as a compelling small cap growth story with considerable upside potential.
KEY POINTS
Q2/24 results largely in line. Production of ~7.3 mboe/d (64% gas) was in line with expectations, while price realizations of $40.76/boe were ~3% behind. Opex of $17.46/boe was ~18% worse than consensus due to a major turnaround at the Simonette gas plan. Importantly, LGN reiterated its full year opex guidance at $12.62/boe, with 2H guided at $10.00/boe to $10.50/boe (better than we expected). AFF of ~$8.9M ($0.02/share) came in ~6% below the Street on the higher opex - but the dollar value of the difference was minimal (law of small numbers), while capex of $46M was in line with consensus. See Exhibit 1 for detailed results versus consensus expectations (Neutral).