CIBC recommends PBN/PBKEF with $21 target over next 12-18mo:
January 12, 2012 Oil & Gas - Dividend Corporations
PetroBakken Energy Ltd.
Positive Update; December Production Of 50,000 Boe/d Exceeds Guidance
? PetroBakken provided an operational update last night, highlighting that
December production averaged more than 50,000 Boe/d, exceeding the
high end of its 2011 exit guidance of 46,000-49,000 Boe/d, and with
another 1,450 Boe/d of production currently shut-in and awaiting tie-in.
? We view the update as positive and have bumped our 2012 production
forecasts modestly by 1%. We also highlight that PBN is now ~40% hedged
for H1/12 (at an US$84/Bbl floor and a US$117/Bbl ceiling) and ~20%
hedged for H2/12 (with a US$77/Bbl floor and a US$121/Bbl ceiling).
? No update was provided on asset sales, but PBN stated that it remained
$150MM undrawn on its $1.35B credit facility at the end of December
(essentially unchanged from the end of June). PBN continues to assess
options to address its $750MM conv. debentures (putable in Feb. 2013).
? We maintain our Sector Outperformer rating and $21 price target. We
continue to view shares of PBN as grossly undervalued at current levels,
trading at a 2012E EV/DACF multiple of 4.8x and a P/Risked NAV of 50%
(vs. the group averages of 8.1x and 76%, respectively).
Stock Price Performance
Source: Reuters
All figures in Canadian dollars, unless otherwise stated. 1 2-113744 © 2012
CIBC World Markets does and seeks to do business with companies covered in
its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report.
Investors should consider this report as only a single factor in making their
investment decision.
See "Important Disclosures" section at the end of this report for important
required disclosures, including potential conflicts of interest.
See "Price Target Calculation" and "Key Risks to Price Target" sections at the
end of this report, where applicable.
Jeremy Kaliel Serhiy Petrenko
Stock Rating:
Sector Outperformer
Sector Weighting:
Market Weight
12-18 mo. Price Target $21.0
Take time to look around, even on a down day!
