Atlas Energy’s Plans To Drill Two Horizontal Well Unlikely To Be Accretive To NAV
Analysts at Pritchard Equity Research maintain their "buy" rating on Atlas Energy (NASDAQ: ATLS), while reducing its estimates for the company. The target price for ATLS has been reduced from $72 to $68.
According to Pritchard Equity Research, “ATLS announced that it has 105,000 net acres prospective for both plays, which underlie parts of its Marcellus holdings. By year-end, it plans to drill two Utica and one Devonian horizontal well. One of the Utica wells will be near another well rumored to have had an IP rate of 9 MMcfe/d. Currently, we assume no value for either play in our NAV.”
“With approximately 105,000 net prospective acres in Michigan's Upper Penninsula, strong results here could be a driver. ATLS is strongly considering a split from its MLP business, Atlas Pipeline Partners, L.P. (APL-$17.98). We would consider this a major positive move because it would make the company's story more transparent to investors,” the analysts say.
Pritchard Equity Research has lowered its EPS estimates for 2010 and 2011 from $0.66 to $0.51 and from $0.76 to $0.58, respectively.
