CIBC World Markets Inc. analyst Ian Macqueen lowered price target on shares of Coastal Energy Co. (TSE:CEN) to $23 from $23.75, while maintaining "Sector Outperformer" rating.
CEN reported its Q1-2012 financial and operating results with average production of 22,773 Bo e/d (sales of 20,213 Boe/d), up 57% sequential and in-line with Macqueen's 22,609 Boe/d estimate.
The company's Q1 cash flow per share (CFPS) was $0.70, below the analyst's $1.25 estimate and consensus of $1.13, due to lower sales versus production (232,924 Bbl inventory build), lower realized pricing ($112.49/Bbl versus $114.16/Bbl estimate), higher G&A ($8.3 million versus $6.0 million estimate), and $37 million of current tax.
The brokerage lowered its 2012 EPS estimate for Coastal Energy to $3.55 from $5.07, while increasing its 2013 estimate to $4.31 from $3.37.
Going forward, Macqueen is assuming the company is taxable and is accruing income taxes which will be cash payable in June 2013, thereby reducing 2012 CFPS, but increasing it in 2013. The analyst also increased G&A/quarter assumption to $8 million up from $6 million.
Macqueen has rolled model forward to Q2/12, increased G&A assumptions and reduced pricing assumptions, which shaves about $0.75 from net asset value (NAV). CEN trades at 92% of 2P NAV (62% of risked NAV) and 3.3 times 2013 cash flow.
Coastal Energy is an international oil and gas exploration and development company with operations in offshore Thailand. The company has a 36.1% interest in Apico LLC. Coastal has 100% working interest in Block G5/50 and G5/43 (within the boundaries of Block G5/43).
CEN is trading down 5.74% at $13.30 on Wednesday. Providing quality reviews, articles and writings on crude oil, energy and gas online.
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