Reports Second Quarter Results, Engages in Strategic Alternative Review
RMP reported second quarter operating and financial results that would have trailed our expectations prior to its announcement of its engagement in a strategic alternatives process. Clearly, market focus will shift from a growth perspective to a near-term underlying asset value build-up, of which we refine in this Facts with the latest well deliverability and forward commodity price curve information. We have reduced our 12-month target price to $1.40/sh on this basis, with an implied EV/DACF target valuation in line with the notional 6.0-8.0x band we generally observe in the M&A market on a near-term or 2017e outlook.
22 Aug 16
PROVIDES A BANK FACILITY AND OPERATIONS UPDATE, INITIATES A STRATEGIC REVIEW
Impact: Neutral to slightly negative. Unplanned facility and pipeline outages have reduced estimated 2Q16e volumes and corresponding 2016e annual production guidance by ~7% (on an unchanged capital budget of $50 mm). In light of a challenging commodity environment and being capital constrained, RMP's has initiated a strategic review process to unlock resource value with our current RENAV methodology, inclusive of its partial recognition of its recently acquired Gold Creek property, suggests a valuation of ~$2.70 per diluted share (~$1.30 per diluted share using strip pricing).
05 Aug 16
2Q16e Quarterly Preview
Some Recovery on Segmented Cash Flow Generation Over Q1 Though Still Down 56% Y/Y. In aggregate, the Intermediate, Mid, and Small Cap groups are expected to generate 2Q16e cash flow of $1,281 mm, $183 mm, and $53 mm, or $1.517 billion in total, that while depressed relative to the same period last year (~$2.647 billion combined), is up 17% sequentially from the prior quarter, largely on the strength of crude oil price recovery in the period. Severely weak natural gas pricing picture markedly reversed into summer, market likely to ignore financials for natural gas producers and look ahead to winter and formalization of sell-side 2018e estimates in coming months. Spot AECO natural gas prices recently crested C$2.60/mcf, and with a reasonable alignment of previously distressed NE BC Stn2 differentials, augmented by a withdrawal expected next week, view the market psyche as constructive and looking ahead, with the analogy that this market is shaping up to mirror 2012 still holding. That said, with crude oil poised to retest support levels, combined with strong stock price performance broadly observed YTD, we would characterize sentiment as slightly pessimistic in the near-term which could reduce or unwind momentum-based investment strategies that have worked thus far in 2016.
RMP AAV ARX BTE BNP CPG ERF POU PEY PGF PWT PSK VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS NVA PPY PMT PNE RRX SRX SGY TOG TET ATU CKE GXE IKM LXE MQL PRQ SPE SKX TVE TVL YO ZAR
26 Jul 16
RMP CORPORATE UPDATE
We had the pleasure of hosting RMP management on Monday afternoon for a quick update on its core operating areas, specifically at its emerging light oil Montney play at Gold Creek. The Company recently announced that it has increased its land position at Gold Creek by 20 net sections to 74 (73.5 net) sections within the heart of the fairway and reported test results from its first exploration well at 3-22.
31 May 16
ANNOUNCES ACQUISITION OF FURTHER GOLD CREEK AREA ASSETS
Impact: Neutral to slightly positive. We view the land acquisition as not overly material, though a potential positive data point in terms of consolidating assets in this environment at an efficient time, with further well test detail allowing for further tangibility for a material resource wedge addition in the medium-term.
26 May 16
Intermediates, Mid Caps & Small Caps
With this publication we briefly summarize our projections for 1Q16e quarterly results for the Junior E&P (Intermediate, Mid & Small Cap) segments of our coverage universe
RMP AAV ARX BTE BNP CPG ERF POU PEY PGF PSK VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PMT PNE RRX SRX SGY TOG TET ATU CKE GXE IKM LXE MQL RE SPE SKX TVE TVL YGR YO ZAR
26 Apr 16
Domestic E&P Statistical Package and FD&A Review
With this publication we highlight various metrics and statistics forthcoming from yearend reserve books for our Domestic E&P coverage universe (Integrateds, Large Cap, Oilsands, Intermediate, Mid Cap, and Small Cap). Similar charts for YE2014 reserves can be found in our Statistical Package dated April 7, 2015.
RMP AAV ARX BTE BNP CPG ERF POU PEY PGF PWT VII TXP VET WCP BNE CJ KEL LTS LRE NVA PPY PMT PNE RRX SRX SGY TOG TET ATU BXO CKE GXE IKM LXE MQL SKX TVE TVL YGR YO ZAR
12 Apr 16
Closes Financing, Update Year-End Results
Post restriction following our participation in RMP’s recent equity financing, issuing ~24.5 mm shares at $1.41/sh for gross proceeds of ~$34.5 mm, we summarize the Company’s fourth quarter operating and financial results plus its 2015 year-end reserve book which were released in the interim. Further, we formally revised our forecast subsequent to our Commodity Price Update of last week. We have lowered our 12-month target price to $1.75/sh though retain an Outperform ranking on implied returns within its peer group, citing a discount valuation and RENAV excluding future opportunities at Gold Creek and Ante Creek secondary recovery upside at this juncture.
29 Mar 16
Intermediate/Mid/Small Cap Commodity Price Update Impact
With this publication we highlight forecast revisions associated with our crude oil commodity price update. Concurrent within a dynamic time for E&Ps, some of which have already begun the process of 2016 capital budget downdrafts, revised estimates attempt to directionally capture a shift towards capital conservation, though severely weakened futures curves have influenced our thinking for the better part of 6 months anyway. We expect further capital investment reductions forthcoming from E&Ps in the coming weeks.
RMP AAV ARX BNP CPG ERF POU PEY SPE SGY TVE TOG TOU VET GXE KEL NVA PPY BTE PGF PSK PWT VII WCP BNE CJ CR DEE JOY LTS LRE PMT PNE RRX SRX TET ATU BXO CKE IKM LXE MQL RE SKX TVL YGR YO ZAR
08 Feb 16
RMP Provides 1H16e Capital Budget, Highlights New Strategic Acreage Positions in the Montney and Duvernay
RMP has announced its 1H16e guidance including a capital budget of $30 mm, expected to be funded through internally generated cash flow, and result in corresponding production volumes of 10,500-11,000 boe/d, which was behind our prior forecast. Incorporating RMP’s 1H16e outlook into our estimates and reducing capital spending for 2016e to $60 mm (to be within cash flow at current strip pricing), we observe a 16% reduction to corresponding production volumes to 10,650 boe/d, although net debt exiting the year is modestly better than our prior view at $118 mm, or ~0.8x the Company’s recently revised credit facility of $150 mm (down from $175 mm prior).
18 Dec 15
RMP ENERGY LTD. (RMP) PROVIDES FIRST HALF 2016 CAPITAL BUDGET AND HIGHLIGHTS NEW STRATEGIC ACREAGE POSITIONS
Impact: Negative. Although we view RMP's $30 mm 1H16e capital budget as prudent in light of volatility in the current commodity environment, given development activities that are weighted 40% to longer-term projects, the Company's corresponding 1H16e corporate production of between 10,500-11,000 boe/d is behind our current outlook.
17 Dec 15
New Commodity Price Outlook Impact
“Worse? How could they get any worse? Take a look around you, Ellen. We’re at the threshold of hell”. These are the words spoken by Clark Gris-wold in the holiday classic “Christmas Vacation”, and seem aptly suited for the general sentiment in the Canadian energy space at the moment as we roll out a summary of our regular forecast revisions extending from our most recent crude oil and natural gas price forecast update.
RMP AAV ARX BTE BNP ERF POU PEY PGF PSK PWT VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PMT PNE RRX SRX SGY TOG TET ATU BXO CKE GXE IKM LXE MQL RE SPE SKX TVE TVL YGR YO ZAR CPG
14 Dec 15
FirstEnergy - DAILY RESEARCH SUMMARY
Baytex Energy Corp. (BTE): 3Q15 Analysis, Upgrading to Outperform | Bonterra Energy Corp. (BNE) Announces Third Quarter 2015 Results, Reaffirms Sustainability Measures | Ember Resources Inc.: Update, Introduction of 2017e Estimates | Encana Corporation (ECA) 3Q15 Update | Rock Energy Inc. (RE) Reports Third Quarter Results, Provides Preliminary 2016 Guidance
RMP BTE BNE ECA RE OXC TXP WZR CEU TCW ENB
16 Nov 15
INTERMEDIATES, MID CAPS & SMALL CAPS - 3Q15e Quarterly Preview
With this publication we briefly summarize our projections for 3Q15e quarterly results for our Junior E&P (Intermediate, Mid & Small Cap) coverage universe. Within the backdrop of continued weakness in the commodity price complex that saw the retrenchment of crude oil pricing during the quarter, after what was a short lived rally during the second quarter, we are anticipating yet another lacklustre reporting period in the Junior E&P space, with the key themes coming out of the quarter likely to be centered on further reductions to capital programs, ongoing takeaway capacity constraints, potential dividend cuts, reduced bank lines from fall credit reviews, continued weakness in the Station 2 and CREC natural gas price markers, and for some, the rollout of formal 2016e budgets.
RMP AAV ARX BTE BNP CPG ERF POU PEY PGF PWT PSK VII TOU TET VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PMT PNE RRX SRX SGY TOG ATU CKE GXE IKM LXE MQL RE SPE SKX TVE TVL YGR YO ZAR
23 Oct 15
INTERMEDIATES, MID CAPS & SMALL CAPS- Intermediates, Mid Caps & Small Caps: New Commodity Price Outlook Impact & 2017 Estimates Rollout
With this publication we are formally rolling out our 2017e forecasts for the Intermediate, Mid, and Small Cap groups, which accompanies our regularly scheduled crude oil and natural gas price forecast update. Less than a month removed from making major revisions to our crude oil price outlook in an interim update, this time around only minor changes to our commodity price outlook have been noted, leaving our initial glimpse into 2017e forecasts as the main takeaway in this publication.
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28 Sep 15
RMP Energy Inc. Management Update
Following a management update ahead of kicking off conference season, we update our forecast and our NAV methodology to reflect new type curve application at Ante Creek. There are no material changes to our volume or CFPS growth projections within this report, though CFPS generation is slightly better on account of modestly reduced royalties in 2016e.
15 Sep 15
INTERMEDIATES, MID CAPS & SMALL CAPS - Crude Oil Downdraft, Though Remain Far More Constructive Than Current Forward Strip Would Suggest
With this publication we highlight forecast revisions stemming from an interim commodity price update centered around the crude oil pricing complex. Moves for crude oil weighted producers are significant, with 2016e cash flows down 12%-15%, and portended NAVs reduced sizably on the employment of a materially lower terminal value within the scope of the forecast period, though not reflective of the potential attrition in E&D capital investment and dividend policy should the current forward strip come to fruition in the cash market.
RMP AAV BTE BNP CPG ERF POU PEY PGF PSK PWT VII TOU VET WCP BNE CJ CR DEE JOY KEL LTS LRE NVA PPY PMT PNE RRX SRX SGY TOG TET CKE GXE IKM LXE MQL RE SPE SKX TVE TVL YGR YO ZAR
31 Aug 15
Junior E&P 2Q15 Review
Within this publication we summarize changes to forward estimates coming off of the reporting of second quarter financial and operating results, highlighting equity price movements and a few valuation comparatives through to the end of 2016e.
RMP ARX BTE BNP CPG CR ERF LTS LRE POU PEY PGF PSK PWT VII TOU TET VET WCP AAV BNE DEE JOY KEL NVA PPY PMT RRX SGY TOG CJ CKE GXE IKM LXE MQL RE SPE PNE SRX SKX TVE TVL YGR YO
20 Aug 15
RMP Announces Second Quarter Results Ahead of Expectations
RMP reported second quarter financial and operating results that were in line to ahead of expectations, which is positive. The Company has revised its 2015e forecast, a direct result of 3rd party takeaway restrictions only now being alleviated (Alliance). Our 2015e and 2016e growth and funds flow forecasts are down, though a large driver of a reduced 2016e view is our election to portray heightened capital preservation at this juncture.
14 Aug 15
INTERMEDIATES, MID CAPS & SMALL CAPS 2Q15e - Quarterly Preview
With this publication we briefly summarize our projections for 2Q15e quarterly results for our Junior E&P (Intermediate, Mid & Small Cap) coverage universe. In what could be viewed as the “Perfect Storm”, we are anticipating yet another weak reporting period in the Junior E&P space as continued deterioration of the commodity price complex will surely influence 2H15e capital investment plans, exacerbated by ongoing takeaway capacity constraints that have resulted in rolling shut-ins for many of the names that we cover, within the backdrop of an uncertain fiscal regime in Alberta in the interim. Typically the second quarter is already a relatively quiet period to begin with in terms of activity in the field due to the onset of spring breakup, though with most shuttering operations early in late February motivated in part to extract service cost deflation in a volatile pricing environment, activity specific to 2Q15e should be muted.
RMP ARX BTE BNP CPG CR ERF LTS LRE POU PEY PGF PWT VII TOU TET VET WCP AAV BNE DEE JOY KEL NVA PPY PMT RRX SGY TOG CJ CKE GXE IKM LXE MQL TOU PNE RE SPE SRX SKX TVE TVL YGR YO ZAR
23 Jul 15
RMP Energy Inc. (RMP) Announces 1Q15 Financial Results
RMP has reported its 1Q15 financial results with production in-line, given a prior mid-April operational update, from capital spending higher than anticipated. Corresponding cash flow was well ahead of our forecast as a result of the monetization of the Company’s crude oil hedging contracts within the period.
15 May 15