UPDATE: Stifel Nicolaus Initiates Buy, $25 Target on Sanchez Energy
Stifel Nicolaus initiates coverage on Sanchez Energy (NYSE: SN) with a Buy rating and a price target of $25, as it sees the company to have leverage on one of the biggest and best oil resource plays in North America.
Stifel Nicolaus says, "An inventory of 150-240 locations in the prolific Karns Trough in Gonzales County, where the company has completed six wells with a 30 day average rate of 950 Boe/d, is sufficient to drive triple-digit y/y proved reserve and production growth for at least the next two years and double-digit growth for at least the following five years. Moreover, the six producers are closely tracking our type well, which generates a pretax IRR of 20% at an oil price of $58/Bl."
SN closed at $25 a share on Friday.
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