TriOil Resources Ltd TRIAF

Canaccord comments on latest NR

[barak]

(snagged from board on IV site)

 

2 February 2011

TriOil Resources Ltd. | Brian Kristjansen, 1.403.691.7807

TOL : TSX-V : C$4.51 | C$141.2M | Buy , Target C$8.75

• Lochend success; 2011 guidance in line; reiterating BUY and C$8.75 target

Event

TriOil announced its first 100% w.i. Lochend Cardium horizontal well which was

completed under budget with a 13-stage nitrified oil frac. The well flowed for 8

days at an average of 500 Bbls/d (including frac fluid) and averaged 275 Bbls/d in

the final 40 hours, having recovered 79% of its frac fluid. This data is too

preliminary to provide a meaningful comparison to our forecast type-curve (which

is based on 30-day rates), though we are pleased to have confirmation of

productive reservoir in the north end of Lochend.

TriOil also released 2011 guidance, with spending of $60 million to net a

production average of 1,900 - 2,050 BOE/d (exiting at 2,300 – 2,500 BOE/d). The

company also announced the sale of 300 BOE/d of natural gas production for cash

and shares of a small public company for $5.9 million, making forecast

production increasingly oil-weighted. Company guidance is largely in line with

our prior estimates once the disposition is accounted for.

Impact

Positive. Although in its early stages, successful efforts at Lochend affirm our

inclusion of risked Cardium upside in our TriOil target price.

Recommendation and valuation

We are reiterating our BUY recommendation with an unchanged C$8.75 target

price. Our target remains based on an unchanged 6.0x 2012E EV/DACF multiple

plus $2.19 of risked upside.

TriOil currently trades at 4.4x 2012E EV/DACF and $71,956 per BOEPD based on

our 2012 estimates.

[Paralyzer]

So why the disconect ???First Call Earnings Valuation Report Sell 0 Under Perform 0 Hold 0 Buy 3 Strong Buy 4 Analysts CheersParalyzer

[barak]

Your formatting seems a bit screwed up.  I think it says 3 buys, and 4 strong buys.So I take it the disconnect you mention is between the analyst recommendations and the low price relative to Cannacord's target.  My first reaction to that is, not sure how these guys can rate this stock a buy or strong buy.  It is a speculative buy at best.  Lots of opportunity for

[Paralyzer]

 I think it says 3 buys, and 4 strong buys....correct    Say what you want they are exacuting and they do have cash flow...They are growing and no speculation here my friend...imoYour way of thinking makes all Companies Spec plays...lolCheersParalyzer

[barak]

"Your way of thinking makes all Companies Spec plays...lol"To a degree they all are.  Some are just a lot more spec than others.  Risk/reward.If it was a slam dunk, they would be at $8 right now.Not knocking them, just providing my opinion on your question.BTW have you heard of Trimox and Canext?