onsdag 16 november 2016

Canacol TD och Canaccord

CNE.TD.161115.pdf

Utdrag ur Canaccord på samma ämne:
Nelson-6 hits a home run
Canacol announced an excellent test rate at its Nelson-6 location on its 100% Esperanza
block. At 23 MMcf/d, the test significantly exceeded our 5-8 MMcf/d expectation while
establishing commerciality on a new play concept in the shallow Porquero reservoirs. In
our view, this commercial discovery could open up a large inventory of prospects within
Canacol's Esperanza, VIM-5, VIM-21 and VIM-19 blocks, making it a potentially important
discovery.
Three additional prospects should spud by year-end
As part of its goal to add reserves and productive capacity, Canacol expects to have
results from three additional drilling locations over the next couple of months. These
wells include Nelson-8, Clarinete-3 and Mono Capuchino-1, all of which are outlined
in detail in our note. Nelson-8 and Clarinete-3 are both targeting production additions
ahead of the expected commissioning of a new 100 MMcf/d pipeline in late 2018. The
Mono Capuchino-1 oil exploration well will test a thick fractured shale on the VMM-2
block in the Middle Magdalena basin. In our view, Mono Capuchino is an important well
as it could open up a material inventory of drilling locations, similar to Nelson-6.
Estimate revisions
We have made minor revisions to our estimates, primarily updating our assumptions
to reflect Q3/16 actuals. The biggest changes pertain to blended royalty rates on the
company's gas assets and operating expenses on Canacol's oil assets. As a result of
these changes, our 2016E CFPS has fallen from US$0.41 to US$0.38 (C$0.54 TO
C$0.50). Our Base (2P) 2016E NAV has also declined to C$5.75/sh (from C$5.90/sh)
while our risked NAV is down 2% to C$8.90/sh.
Raising target on exploration success
To account for Canacol's recent success at Nelson-6 and Trombon/Nispero, we are
raising our target to C$6.00/sh (from C$5.75/sh). Our target now includes ~40 Bcf for
the two prospects valued at ~$1/Mcf (after taxes, discounted at 10%). We believe this is
conservative relative to pre-drill expectations of 30 and 40 Bcf, respectively; we note that
Canacol is now batting an 86% success rate on its gas exploration program.
Valuation and thesis
We continue to believe an announcement surrounding gas contracts could be a material
near-term catalyst for the company, as it would solidify future revenues to a large extent.
We estimate a potential value of C$2.10-3.00/sh associated with a 10-year, 100 MMcf/d
contract based on a gas price of $4.50-5.50/Mcf. Our target aligns with our 2P NAV, plus
a small amount of upside (C$0.25/sh) for the recent Nelson-6 and Nispero/Trombon
discoveries.

Märkligt nog finns uppgifter om att CIBC sänkte riktkursen från 6 till 5.5. Jag har inte läst den rapporten.

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