TGA, GTE, et al

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Analyst Actions: Credit Suisse On Canadian International Oil and Gas; Gran Tierra, Coastal Energy Its Picks 06/28 11:21 AM

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12:21 PM EDT, 06/28/2013 (MidnightTrader) -- Commodity Update and Review; Lowering Target Prices


Macro and Brent: Credit Suisse has trimmed its Brent forecast by US$5/bbl for H2/13, reflecting reduced confidence in global growth. It is becoming increasingly apparent that more moderate growth is structural in nature and that the prospect of new stimulus is remote. That said, Brent remains supported relative to other commodities given subdued supply growth. Brent forecasts for 2014 and beyond have remained unchanged at this time with LT still at US$90/bbl.

CFPS Changes: "Concurrent with Credit Suisse's commodity update, we lower our average 2013E CFPS by 5%, while our forward years estimates remain relatively unchanged."

Target Price Changes: "In conjunction with our price deck revisions, we make the following changes to our target prices: (1) we lower our TP on Coastal Energy (CENJF:$12.85,00$0.3737,3.00%) to C$28 (was C$32) and maintain our Outperform rating, (2) we reduce our TP on TAG Oil to C$4.50 (was C$6.50) and maintain our Neutral rating, and (3) we lower our TP on TransGlobe Energy to C$8.50 (was C$10.50) and maintain our Neutral rating. In addition, we reduce our TP on Gran Tierra Energy (GTE:$5.84,00$0.04,000.69%) to US$8.75 (was US$9) and maintain our Oupterform rating, while we also lower our TP on Petrominerales to C$6.25 (was C$6.50) and maintain our Underperform rating."

Outperform Recommendations: "Gran Tierra Energy (GTE:$5.84,00$0.04,000.69%) and Coastal Energy (CENJF:$12.85,00$0.3737,3.00%) remain our two recommended stocks at this time. In the near term, Gran Tierra may have more meaningful catalysts from its Brazil operations where we could see well results from its horizontal multi-stage frac program, possibly in the late July 2013 or early August 2013 time frame. In the longer term, and considering the valuation at which it currently trades, we believe Coastal Energy (CENJF:$12.85,00$0.3737,3.00%) is the most compelling. However, we believe the stock could be in a range-bound pattern in the upcoming months until production re-establishes an upward trajectory."

Price: 13.45, Change: +0.37, Percent Change: +2.83

http://www.midnighttrader.com

[dan_s]

GTE sales will dip in Q2 but growth should be strong in the 2nd half.

TGA is solid but geopolitical risk is high and will keep a lid on the share price I am afraid. Rock solid balance sheet, strong cash flows and top notch management team.