Welcome To The Questerre Energy HUB On AGORACOM
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Message: Increasing focus on Montney shale.
This is the latest analysis supplied by DnB (8th November). It's from within my online bank so I can't provide a link.
Questerre is due to report its Q3 results on Thursday 15 November. We expect Q3 EBITDA of CAD2.2m and a net loss of CAD0.1m. The test of the second Montney horizontal well on the company’s acreage in Alberta was encouraging, and we expect increased focus on this acreage going forward. We reiterate our BUY recommendation and NOK7 target price.
Q3 results due on 15 November. We forecast EBITDA of CAD2.2m and a net loss of CAD0.1m. We expect quarterly production to see a sequential increase from a low level in Q2, which was affected by wet conditions and road bans that led to reduced production from assets in the Antler area. For Q3, we expect an average production level of 680 barrels per day, with more than 80% of total output being liquids.
Do not expect any major news.
We do not foresee any operational information or outlook update of major importance to be announced in the quarterly report. However, we expect the company to allocate more resources to its acreage in the Kakwa- Resthaven area in the future, following two production tests that have shown strong flow rates with high liquids content.
Negligible estimate changes.
Following some adjustments to expected price realisations and production levels for this year, we have trimmed our net earnings estimate for 2012 from CAD-2.0m to CAD-2.1m, our 2013 estimate is unchanged at CAD3.2m and we have revised our 2014 forecast from CAD3.7m to CAD3.6m.
Valuation and recommendation.
We reiterate our BUY recommendation and NOK7 target price, implying 0.6x our NAV estimate. Although a large portion of the company’s assets are not expected to generate significant news flow in the near term, we believe the market may put increased emphasis on the potential of the company’s acreage position in the Kakwa-Resthaven area going forward, where we have seen encouraging test results from two horizontal wells the company has participated in during the past six months.
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