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Stifel Projects 150% Upside For Lilis Energy In Bullish Initiation

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Stifel Projects 150% Upside For Lilis Energy In Bullish Initiation

Lilis Energy (NYSE: LLEX)'s recent transactions suggest the stock holds substantial upside, according to Stifel. 

The Analyst

Stifel analyst Michael Scialla initiated coverage of Lilis Energy with a Buy rating and $12 price target.

The Thesis

Lilis Energy retains 19,400 net acres in the Delaware Basin, where recent transactions have valued the property at nearly $27,000 per acre, Scialla said in the initiation note. (See the analyst's track record here.) 

Lilis has completed 17 wells. "Based on 90-day and six-month averages, the company's Wolfcamp wells are performing near the average of offset operators, including RSP Permian, Inc. (NYSE: RSPP), albeit with a slightly higher gas-oil ratio," Scialla said. 

Lilis is expected to complete wells in new zones and improve efficiency with higher volumes, the analyst said. 

Lilis has struck long-term agreements to sell oil, gas and natural gas liquids at Midland, Waha hub and Mont Belvieu prices, according to Stifel. 

“While Lilis is currently trucking oil to a terminal at Wink, its midstream partner is expected to complete a gathering line to the terminal by [the first quarter of 2019]. The company also has sufficient access to water and disposal capacity for its 2018 plan and beyond.”

Price Action

Lilis shares were 1.92 percent higher at $4.78 at the close Wednesday. 

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Latest Ratings for LLEX

DateFirmActionFromTo
Oct 2019DowngradesBuyNeutral
Aug 2019DowngradesBuyHold
Mar 2019Initiates Coverage OnEqual-Weight

View More Analyst Ratings for LLEX
View the Latest Analyst Ratings

Posted-In: Michael Scialla StifelAnalyst Color Price Target Initiation Analyst Ratings Media

 

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