Canadian brokerage firm Canaccord Genuity recently released a report maintaining its BUY recommendation and C$6.25 target share price for oil and gas company Pinecrest Energy (PRY:TSXV). The share price is based on a six times multiple of 2012 estimated EV/DACF, along with the upside potential of the Slave Point play that exists in Red Earth in Central Alberta.
Penn West Exploration is the largest exploration and production company working in Pinecrest's Slave Point play. Penn West recently announced during its annual analyst day that it expects single-leg horizontals existing in the play to generate 300,000 to 340,000 barrels of oil equivalent. This metric is in line with previous estimates made by Canaccord Genuity predicting production of 325,000 barrels of oil per day (bbl).
Cannacord Genuity did not alter its estimated ultimate recovery (EUR) for the wells. The financial services provider noted that if it used a 325,000 bbl estimate, the net present value (NPV) per well would rise to C$9.2 million from C$5.4 million.
Pinecrest Energy Inc.'s stock opened at C$2.15 on September 26 and hit a 52-week high/low of C$3.19 and C$1.30, respectively.