Post by
BioBilly on Sep 03, 2013 2:42pm
Canaccord's Comments Today
Novus Energy* (NVS : TSX-V : $0.86), Halted
Still waiting for the Chinese buyers to emerge? Shares of Novus Energy have remained halted on the TSX Venture Exchange since Wednesday. The Hong Kong Economic Times reported on Tuesday that China-based Yanchang Petroleum International Ltd. planed to acquire Novus Energy for C$500 million (or ~C$2.00 per share). At the time of this writing, Yanchang shares remain suspended from trading in Hong Kong. Recall, Novus reported Q2/13 results last week and commented on its ongoing value maximization process. The company confirmed that it is currently in exclusive negotiations with respect to a potential transaction. In that regard, Novus received an order of the Court of Queen's Bench of Alberta, as well as confirmation from the TSX Venture Exchange, that it may delay its annual general meeting of shareholders until October 24, 2013. This may save the company the expense of holding an additional meeting, should the company undertake a transaction which requires shareholder approval.On
December 4, 2012, Novus announced that it had retained financial advisors to assist the Special Committee of the Board of Directors in exploring and evaluating a broad range of options to optimize shareholder value. The company cautions that there can be no assurance that a potential transaction will result from the current negotiations, and Novus does not intend to disclose future developments with respect to the process unless and until the Board of Directors has approved a specific transaction or otherwise determines that disclosure is appropriate or required. Novus' Q2/13 production averaged 3,452 boe/d (80% liquids) falling short of Canaccord Genuity Energy Analyst Steve Toth's forecast of 3,844 boe/d and consensus of 3,939 boe/d. Production was down 15% quarter-over-quarter due to weather conditions which adversely affected its field operations. Second quarter CFPS of $0.07 was commensurately below Toth's estimate and consensus of $0.08 given reduced production volumes. The company has ramped up activity in Q3 with current production of 4,050 boe/d. Subsequent to June 30, Novus has drilled an additional 17 wells in the Dodsland area with continued focus on well costs that have averaged ~$875,000.