UPDATE: BMO Capital Markets Reiterates Outperform Rating, Raises PT on Goodrich Petroleum Corporation on Revised NAV Analysis
In a report published Friday, BMO Capital Markets reiterated its Outperform rating on Goodrich Petroleum Corporation (NYSE: GDP), and raised its price target from $11.00 to $15.00.
BMO Capital Markets noted, “We're raising our target price to $15 based on a revised NAV analysis that incorporates resource value associated with the emerging Tuscaloosa Marine Shale (TMS) oil play found in parts of Mississippi and Louisiana. Here, the company retains ~134k net acres. The sample set of drilling results is limited. The production history more so. That means we're taking a bit of a leap here – as we did in our January 22 upgrade of GDP – that the company (and other producers) can repeat the success realized with the Crosby 12H 1 well that exhibited a peak rate of ~1,300 BOE/d and averaged ~1,200 BOE/d over the first 15 days of production. Strong. We like it. In this comment we examine production history from wells drilled by Encana proximate to the Crosby well in Wilkinson County, Mississippi. We plot this production history alongside three type curves, ~400 MBOE, ~600 MBOE, and ~800 MBOE. Included is our estimate of the 30-day rate on the Crosby 12H 1 producer, the highest among the wells exhibited. Again, strong. We also take a cut at determining after-tax returns at the field level.”
Goodrich Petroleum Corporation closed on Thursday at $12.68.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Tags: BMO Capital Markets