TORC Oil & Gas Ltd. VREYD

TP&H on WCP

[retiredcf]

09:54 AM EST, 01/05/2021 (MT Newswires) -- Tudor, Pickering & Holt on Tuesday reiterated its buy rating on the shares of Whitecap Resources (WCP.TO) with a C$5.50 target price after the company completed its acquisition of NAL Resources and issued new guidance.

"Yesterday, WCP announced preliminary Q4'20 results along with a Q1'21 drilling program; with both largely in-line with expectations we see the release being neutral for the stock," the investment bank said in a note. "On the quarter, production of 63mboepd is slightly ahead of the Street (61mboepd) but in-line with TPHe (63mboepd) on in-line spending of C$20mm (Street C$20mm, TPHe C$15mm). On our December mark to market, we see this generating C$115mm of cashflow for Q4'20 and C$444mm for FY'20, resulting in C$168mm of FCF (pre dividend). Looking ahead to Q1'21, the company outlined capital spending between $115-$120mm (Street $106mm), resulting in production between 89-91mboepd (Street 89mboepd). On strip pricing, we see this generating FCF of C$375mm, equal to a free cash yield of 13%, or 9% FCF/EV ... With our constructive crude outlook ($60 Brent H2'21) and bias towards owning the consolidators, WCP remains our top SMID cap oil pick."