UPDATE: Wunderlich Reiterates Buy Rating, Raises PT on Approach Resources
In a report published Monday, Wunderlich Securities reiterated its Buy rating on Approach Resources (NASDAQ: AREX), and raised its price target from $49.00 to $52.00.
Wunderlich noted, “Last week, Devon Energy (DVN-NR) announced a $1.4B JV, putting a $7,200/acre price tag on its Midland Basin leases. Using this metric, AREX's 145,000 net acres can be worth $1B or $31 per share; adding the company's mid-year proved reserves net of debt of $665 million or $20 per share, AREX is worth $51 per share, consistent with our new NAV estimate. For the Wolfcamp play, AREX is still sticking with a well count of 500, EUR of 450,000 boe, and resource potential of 225 mmboe. This inventory is comprised of mostly bench B wells and some bench C wells; successful tests in bench A can add more locations. AREX is in a great play and land prices should escalate. We don't expect this to go un-noticed; we would by AREX shares today.”
Approach Resources closed on Friday at $27.07.
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