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I'm Mittita Barber for InvestmentPitch.com
National Bank Financial has updated coverage on Donnycreek Energy, symbol DCK on the TSX
Venture Exchange.
Following the company's operations update for its activities in the Wapiti and Kakwa
areas, analyst Matthew Taylor gives the company an outperform rating, increasing the 12-month
price target from $3.25 to $3.75, a healthy premium of 45% to the $2.58 price on January
20th, the day his report was issued.
Donnycreek is a pure-play Montney producer with a significant footprint in the deep basin
of west central Alberta.
The company holds approximately 438 gross, 313 net, sections of petroleum and natural
gas rights, with an average working interest of approximately 70%, prospective primarily
for Montney liquid rich natural gas resource development.
The company has drilled and tested a sixth middle Montney natural gas well on its Kakwa
block.
The initial gas rates and condensate yields are similar to the previous 5 wells, and should
be tied in and on production by mid-February.
The company is currently conducting a fracture stimulation on its seventh middle Montney
horizontal well.
Following a brief clean up period, and subject to results, it should be tied in and brought
on production by mid-February.
An eighth middle Montney horizontal well is currently being drilled.
Upon rig release, the drilling rig will remain on the same surface lease and commence drilling
the company's ninth horizontal well which will be targeting the upper Montney.
Management was very optimistic at its recent AGM noting logs from its recent Wapiti spud
are very similar to those at Kakwa.
The company planned to only drill a vertical strat test, however, management is confident
enough with the logs and has since kicked off with a 1,600 metre horizontal leg, with
results expected in March.
Donnycreek also reported that its Kakwa central gas compression and condensate stabilization
facility is now operational.
The Kakwa property is connected to Pembina Gas Services wet gas pipeline system for access
to natural gas liquids and natural gas markets
Analyst Matthew Taylor stated, "With construction completed on its Kakwa facility, Donnycreek
has the ability to ramp up production substantially through 2014. In the near term the most impactful
catalyst will be results from its Wapiti exploration well."
The company currently trades at $2.57, well below the $3.75 target price, and with 54.7
million shares outstanding, the company is capitalized at $140.6 million.
For more information, please visit the company's website www.donnycreekenergy.com or contact
Matt Todd, President & CEO at 604-684-2356 or email info@donnycreekenergy.com.
For more information about National Bank Financial or to obtain a copy of their research report,
contact your nearest National Bank Financial office. Their branches are listed on their
website at www.nbf.ca.
I'm Mittita Barber for InvestmentPitch.com For more video news, and to view our disclaimer,
be sure to visit our website www.investmentpitch.com. This video is for information purposes only
and it is not a recommendation to buy or sell any securities.