UPDATE: BMO Capital Markets Raises PT on Advantage Oil & Gas Following Sproule Reserve Evaluation

In a report published Wednesday, BMO Capital Markets analyst Gordon Tait raised the price target on Advantage Oil & Gas Ltd. AAV from $3.75 to $4.25, and maintained an Underperform rating.

In the report, BMO Capital Markets noted, “Advantage released an updated Sproule reserve evaluation for its Glacier property showing 2P reserves increased by 14% to 1.6 Tcf (2P NGLs increased by 318% to 11 MMbbl). The estimated contingent resource at Glacier increased by 138% to 4.2 Tcf. Management prepared a production model demonstrating the potential for the Glacier property to ramp up production to ~580 MMcf/d (from ~100 MMcf/d currently) by 2019 and to maintain this production for ~18 years. AAV also updated its 12-month budget and guidance outlining it will spend $170 million over the next twelve months as it executes its plan to double production to ~200 MMcf/d by 2015.”

Advantage Oil & Gas closed on Tuesday at $4.25.