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National Bank Financial - Updated Coverage - Donnycreek Energy (TSXV: DCK)

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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.

Additional Information:

Company: Donnycreek Energy
Website: http://donnycreekenergy.com/
Stock Symbol: TSXV: DCK
Date Published: Jan 28, 2014
Transcript: Available

Video Transcript:

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
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