Translated from the following Norwegian link: http://www.hegnar.no/bors/energi/article411158.ece

Analysts toast the recent test results from Questerre. They believe the likelihood of commercial development of the Lowlands field has increased and accordingly raise price targets on the stock sharply.

Article by: Marius B. Haugen (Hugin Online - 23.2.10 10:29)


Questerre reported earlier today that they have a stabilized initial production rate of six million cubic feet per day in the horizontal test well, St. Edouard No. 1A St. Lawrance Lowlands, Quebec in Canada.

- The results are significantly above market expectations of about 1,5-2,0 million cubic feet per day. Based on well results, we have raised our target price from 30 kroner before the test to 45 kroner (8 CAD) now, "said Trond Omdal in Arctic Securities to Hugin Online.

Teodor Nilsen in Argo Securities points out that the probability of commercial development of shale gas field has increased significantly.

- The results are far beyond both our and the market's expectations. We assume that the probability of a commercial development of shale gas field in the St. Lawrence Lowlands has increased from 30 to 40 percent and raise price target on the stock from 26 to 34 kroner, "said Theodore Nilsen in Argo Securities to Hugin Online.

Easy to figure their way to 200 per share

- Assuming that the average production rate is as high as six million for the entire Utica, one can easily count them up to a value around 200 per share (35 CAD), but that is somewhat optimistic. If one uses a more conservative production rate of around three million, the unrisked value should be somewhere between 50 and 90 per share(8.80 to 16 CAD), "says Oddvar Bjørgan from ABG Sundal Collier to Hugin Online.


Thomas Aarrestad at Pareto raises price target to 60 kroner (10.6 CAD).

- Test results are very strong and more than double of those we had expected. This is a big step on the road to confirm that the Utica-discovery will be developed commercially. We increase our target price to 60 from 35 kroner. Should the company continue to deliver equally good production rates of future wells we see a potential upside to 200 per share in the longer term, "he says.

All analysts Hugin Online has been in contact with operate with a buy recommendation on the stock, as of this writing is up over 32 percent to 28 kroner.