Analyst Calls Oil E&P 'Most Attractive Small-Cap Montney Name in Our Universe'

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Published : March 12th, 2018
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Category : Companies Highlights

Garett Ursu, an analyst with Cormark Securities, highlighted this energy firm's upcoming well test results and upside potential.

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A Feb. 28 Cormark Securities research note indicated that Blackbird Energy Inc. (BBI:TSX.V) is approaching its "final derisking event," which is the release of test results from the northern 3-27-71-7W6 well, before the company transitions to "a high-growth junior," wrote analyst Garett Ursu.

Initial results, due out shortly, are expected to be "strong" and to confirm "a majority (>75%) of Blackbird's Pipestone acreage to be within the volatile oil window." Consequently, the well results are expected to have a "material and positive impact on the stock," just like those from Blackbird's eastern 2-20-70-6W6 Pipestone well did most recently. They showed a flow of 1,163 barrels of oil equivalent per day and a record 824 barrels per day of condensate.

Following announcement of the 3-27 results, Blackbird will shift Pipestone to "fill plant commitments in mid-2019," Ursu noted. During this phase, "we expect the market to begin to value Blackbird as a growth name rather than a land/net asset value play."

Ursu reiterated Cormark's positive take on Blackbird: "We continue to view the company as the most attractive small-cap Montney name in our universe with approaching catalysts, behind-pipe volumes and a large land base within the desirable liquids-rich Pipestone Montney fairway."

Cormark has a Buy rating and a CA$0.90 per share target price on Blackbird, whose stock is currently trading at around CA$0.38 per share.


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