The following is an excerpt from Canaccord Genuity’s Morning Coffee newsletter.
Canaccord Genuity Energy analyst Steve Toth published a bullish report on
Bellatrix Exploration Ltd. (
TSX: T.BXE,
Stock Forum) after the company announced three positive developments in the past several weeks:
1 The acquisition of
Angle EnergyInc. (
TSX: T.NGL,
Stock Forum) for $576 million.
2 A gross $240 million joint venture with Troika Resources (Korean partner).
3. A $175 million bought-deal equity financing.
Toth maintains a positive outlook for Bellatrix’s stock and values the company at 1.0 times multiple to net asset value and reflecting a 6.4x 2014 EV/DACF multiple.
Toth noted that the acquisition metrics for Angle Energy were attractive at $49,400 barrels of energy (boe) per day and $8.50 boe, and bolsters the company’s size and dominance in west central Alberta.
The Troika JV deal adds $0.80 per share to Toth’s net asset value per share and the financing bolsters BXE’s balance sheet.
Toth thinks that size is increasingly important in the Western Canadian Sedimentary Basin given costlier, deeper drilling, and a larger size and improved outlook for BXE should result in multiple expansion for the stock in his view.
BXE is scheduled to report Q3/13 earnings and 2014 guidance on Thursday, November 7.