Analyst Actions: Credit Suisse Initiates Coverage on Gulfport Energy Corp With Outperform, TP of $41 12/15 11:31 AM
--------------------------------------------------------------------------------
12:31 PM EST, 12/15/2011 (MidnightTrader) -- Utica and Grizzly Offer Big Liquid Potential; INITIATING Coverage with an OUTPERFORM Rating and Target Price of $41
Early Mover in the Utica Shale. GPOR has built a 125k gross (62.5k net) acres position in and around the currently established "core" of the emerging Utica shale play. GPOR remains one of the most leveraged to the Utica, which is expected to be analogous the Eagle Ford shale (oil, gas/condensate, and gas windows) and where early well results suggest industry-leading project returns. Big Resource Potential Embedded in Equity Investments. GPOR holds a 25% interest in Grizzly Oil Sands, which controls more than 700k net acres in the Athabasca and Peace River oil sands region of Alberta, Canada. Grizzly recently received approval for its first SAGD project at Algar Lake and first production is expected in mid-2013. GPOR also holds an 18% interest in the Tatex III partnership that controls a 1-million-acre concession in northern Thailand. The TEW-W well drilled in March 2011 encountered over 5,000 feet of possible gas pay, and GPOR speculates that it could be a multi-TCF gas discovery.
We Initiate Coverage with an Outperform Rating and a $41 Target Price. We derive our target price from our 'PD Plus' net asset value estimate, which is primarily driven by GPOR's large position in the emerging Utica shale play in eastern Ohio and its 25% equity interest in Grizzly Oil Sands ULC. We also credit the company risked development in its legacy West Cote Blanche Bay and Hackberry assets and roughly a six-year project inventory in the Wolfberry trend.
Valuation. GPOR trades at a 33% discount to our 'PD Plus' NAV estimate and 6.5x our 2012 EBITDA estimate versus the Credit Suisse SMID-cap E&P group at a median 31% discount and 4.9x, respectively
Price: 28.68, Change: +1.13, Percent Change: +4.10
http://www.midnighttrader.com