American Oil & Gas (AEZ) To Continue Drilling On Its Bakken Play Through 2010
Analyst Jason Wangler of Wunderlich Securities upgrades American Oil & Gas Inc (NYSE: AEZ) to "buy." The target price for AEZ has been raised from $4.50 to $7.00.
Wunderlich Securities believes that American Oil & Gas and its partner “are currently performing fracture stimulation on the Tong Trust 1-20H well, the first well targeting the Bakken formation on American's 76,000 net acre position in Williams County, ND.” “We expect to hear results on the well by early April. Additionally, the company is currently drilling the Ron Viall 1-25H well. American has a 95% working interest in the Ron Viall well, which we expect to be fracture stimulated in April, leading to more potential upside,” the analyst says.
Wunderlich Securities expects AEZ “to continue actively drilling on its Bakken play through 2010, drilling five to seven net wells on its acreage this year. “We believe the drilling activity should better unlock the value of American's acreage position while also generating incremental production, revenues, cash flows, and reserve growth. We expect American to continue actively drilling on its acreage in 2011… We believe the recent acreage monetization and capital raise gives America enough cash to drill actively through 2011 without having to bring in partners on its acreage position,” the analyst adds.
