UPDATE: Global Hunter Securities Initiates Buy, $25 PT on Sanchez Energy
Global Hunter Securities initiated its coverage on Sanchez Energy (NYSE: SN) with a Buy rating and a price target of $25 as it considers the company a Eagle Ford Shale pure play.
Global Hunter Securities commented, "Sanchez Energy (SN) is a unique small-cap E&P and one of the purest Eagle Ford Shale plays in the E&P sector. Via last December's IPO, SN broke off from its private parent company, Sanchez Oil & Gas (SOG). SN has approximately 404 drillable locations in the Eagle Ford spread around three primary fields. While recent well results may have disappointed investors, our conservatively modeled type curve (which rests well below the company's modeled type curve) still suggests substantial profit potential. Given the solid rates of returns from its Eagle Ford wells combined with a competitive $17 F&D cost per barrel, we believe SN has significant long-term growth potential from a relatively small resource base."
Sanchez Energy closed at $18.69 on Monday.
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Tags: Global Hunter Securities