IMHO, Friday was a perfect day to purchase RRX. The NR was excellent and we would likely have been up considerably more if not for a generally down day on the markets including a near $2 decline in the price of oil. But analysts are beginning to recognize the value of RRX. Here is CIBC's report, however, I consider their outlook and price target to be conservative. (I think I heard a passing comment on BNN on Friday that Canaccord bumped their target to $4.00 - can anyone confirm?). As can also be seen below, other analysts are jumping on board so I would expect a flurry of reports and upgrades shortly. GLTA
Raging River Exploration Inc.
Increased 2012 Capex; Strong Production Growth In 2013; Increased PT To $3.25
? RRX announced an increase to its 2012 capex of ~$15 million, bringing the total to $82 million. The increased capex will support the drilling of 10-12 additional Viking wells this year for a total of 41-43 wells. 2012 exit guidance has increased to 2,800-2,900 Boe/d, from 2,300 Boe/d.
? The impact to our estimates was materially positive. Our 2012 production estimate increased 8% to 2,115 Boe/d (98% oil) and our 2013 production increased 23% to 3,100 Boe/d (98% oil). Our CFPS estimate increased 8% for 2012 and 24% for 2013. Our PT increased to $3.25 from $2.50.
? In addition, based on public data, we have increased our RRX greater Dodsland type well to ~50 Bbl/d and 50 MBbl (from 40 Bbl/d and 40 MBbl). At strip pricing, pre-tax well NPV increased 11% to $1.2 million ($0.9 million a-tax). Our RNAV increased ~5% to $2.43/sh ($2.72 on strip).
? RRX is one of our top oil-weighted juniors due to its strong growth profile (41% per share production growth in 2013, above the oil-weighted group average of 25%), strong balance sheet (on strip, 2013 debt to cash flow of 1.0x vs. oil-weighted group at 1.7x) and long-term growth visibility.