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Alberta-focused Prairie Provident and Point Loma positioned for rebound, says Mackie
Two Alberta-focused juniors have caught the eye of Mackie Research, and the broker reckons both are positioned for a rebound.
Analyst Bill Newman has run the rule over Point Loma Resources (CVE:PLX) and Prairie Provident Resources (TSE: PPR).
Both companies are producers - the former holding more than 225,000 net acres in west central Alberta and with a large drilling inventory of over 400 locations, and the latter targeting Mannville plays within Alberta.
A growth story
Point Loma is a ‘growth story’, points out Newman, whose relatively low well costs and strong production allows for robust economics.
This month, it has completed the acquisition of an additional 400 boepd (barrels of oil equivalent per day) to add to the 570 boepd it had at the end of 2016.
“This was a highly accretive acquisition with Point Loma paying less than $4,000 per flowing barrel,” says the analyst.
Another 450 boepd of behind pipe volumes is expected to be on production this summer taking production up to around 1,350 boepd and after a three wells drilling program, the broker expects production to increase to 1,750 boepd by year-end.
Point Loma is also highly undervalued, trading at a 2017 estimates on enterprise value to discounted adjusted cash flow EV/DACF multiple of just 3.1 times’ and at 46% of Mackie’s core NAV of $1.18/fd share.
Prairie Provident’s acquisition highly accretive.
Meanwhile, Prairie Provident has a larger current production base of around 6,500 boepd, including the recent acquisition of around 1,100 bbl/d (barrels a day) of production near to the firm’s Evi property, says Newman.
The acquisition was highly accretive on a reserves basis as well, adding 3.8 million barrels of proven plus probable (2P) reserves for only $10.72 per barrel of oil equivalent (boe).
Mackie has increased its proven developed producing (PDP) valuation on the firm to $1.57 per share.
In other words, the company is trading at a 60% discount to its PDP valuation of $1.57 per share and a big discount to its proven plus probable value of $2.63 per share.
Point Loma shares stand currently at $0.48, while Prairie Provident’s are at $0.60.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/175239/alberta-focused-prairie-provident-and-point-loma-positioned-for-rebound-says-mackie-175239.html
