Calgary-based exploration and production company Delphi Energy Corporation (DEE:TSX) recently reported that its production averaged 8,967 barrels of oil equivalent per day and that its associated cash flow per fully diluted share was C$0.14 in 3Q11. Canadian brokerage Canaccord Genuity provided slightly higher estimates of 9,319 barrels of oil equivalent and cash flow per share of C$0.15. Canaccord responded to this information by reiterating its C$2.25 target share price and maintaining its HOLD recommendation.

Production results came in lower than expectations as a result of natural gas liquids that were below estimates. The below-target results prompted Delphi to reduce its 2011 production guidance to 8,800-9,000 barrels of oil equivalent per day from the previous estimate of 8,800-9,200.

The exploration and production company announced that its 2011 capital expenditures program will increase by C$10-15 million, which will probably be invested into drilling activities in the Montney shale at Bigstone. The Montney formation covers ground in both Alberta and British Columbia. Delphi recently upgraded its land position to 45 sections and intends to drill two or three long horizontal wells before the end of 2011. Canaccord predicts that the results generated by Delphi's drilling activities in this play will help to foreshadow the future of the company.

The target share price provided for Canaccord Genuity is derived from a 5.5 times multiple of 2012 estimated EV/DACF. Delphi Energy Corporation closed at C$2.26 on November 13 and hit a 52-week high/low of C$2.89 and C$1.30, respectively.