PINECREST ENERGY (V-PRY) $2.95 - 0.25
CRUDE OIL $105.44 -1.83
Pinecrest Energy today releases its much awaited reserve
report/production numbers and obviously the analysts seem
to like it...as we see a few upping their targets. We should
point out however that the analysts have very different targets
on this company because it does have rich valuations,
some assuming that their core holdings in Red Earth will
simply continue to deliver ongoing success with the drilling
bit. (Too bad oil was having such a bad day!)
Canaccord analyst Bryan Kristjansen writes, “Reserve
additions were largely in line with our expectations, with
Proved reserves increasing 381% to 5,320 MBOE and 2P reserves
increasing 364% to 8,387 MBOE.”
Kristjansen notes that based on their Slave Point/Red
Earth map, “At four-well-per-section drilling densities, the
best case (C2) unbooked recoverable resource is estimated
to be 67.5 MMBOE on 584 MMBOE of original oil in place
(“ooip”). We interpret this as directionally confirming our
risked upside estimates.”
Kristjansen continues, “Current production is 3,450 BOE/
d, which is below our prior Q1/12 estimate of 3,950 BOE/d,
though this is due primarily to timing of well tie-ins. With six
wells coming on in April, we remain comfortable in our H2/12
and 2013 estimates.”
As we’ve mentioned, Kristjansen ups his target. For
those who would like a copy