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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
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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
Aug 2018Stifel NicolausInitiates Coverage OnBuy
Jun 2018B. Riley FBRMaintainsBuyBuy
Feb 2018B. Riley FBRInitiates Coverage OnBuy

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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