Cormark had the following comment:
The sales/trader at Scotia (Derek Wheatley) had the following comment:
- DeeThree (DTX-T, $10.81) - Top Pick, $16.50 Target, Garett Ursu: This morning DeeThree released its Q2/14 results. Production of 10,744 BOE/d was in line with our (and consensus) expectations of 10,800 BOE/d resulting in CFPS of $0.49 being also in line with our $0.48 estimate and consensus of $0.48. Operating netbacks of $50.64/BOE were the highest to date and above the $46.43/BOE we were expecting. DeeThree drilled 10 (100% WI) horizontal wells in Q2/14 (7 Alberta Bakken, 2 Belly River and 1 Peace River Arch) with a 100% success rate. The Company drilled its first successful horizontal into the Belly River Basal A sands at Brazeau in the quarter, making the Basal A the 7th individual Belly River sand to produce in the area. The Company also expanded the Belly River C sand to the north and south of the main pool through farm-ins and successful drilling, increasing the size of the Belly River C area to 12 sections. An additional 12 sections of Belly River lands were also added in the quarter, further consolidating the Company's dominant position in the area. Q3/14 guidance is for 12,000-12,500 BOE/d and an exit of 13,000-13,500 BOE/d (in-line with our current forecasts). We reiterate our Top Pick rating and $16.50 target price. - GU
· DeeThree (DTX, not covered) Stock up 3% on Q2 Release; Business Does Look Set-up for Significant 2H Growth by all Measures. While We Don’t Cover DTX, This is Clearly One of the Very Best Firms We Don’t Cover in E&P…Valuation Seems to be Disconnected from the Growth in the Underlying Business. As Well Performance / Type Curves are Demonstrated, DTX Would Seem to be One of the Most Obvious Targets in Canadian E&P (…offers both scale and economics RBC’s sale/trader, Nick Sellmer was also very positive: DeeThree Exploration (DTX CN): Another strong quarter of sequential growth
. DTX posted Q2 avg production of 10,744 boe/d (80% liquids), in-line with street estimates, and CFPS of $0.49 just ahead of street $0.48. The volumes for Q2 represent 15% growth QoQ and speaks to the full year access and organic growth generated by the company’s two core oil assets in the Ab Bakken and Belly River at Brazeau. DTX’s balance sheet remains in strong shape, drawn $116mm or well under 1x D/CF run rate. Guidance for Q3 has been provided in the 12-12.5mboe/d range and the exit rate of 13-13.5mboe/d has been unchanged. Considering that this growth (50% YoY) is self funded and organically driven, it is incredibly impressive and should start to differentiate DTX among peers. Trading at roughly 4x 2015 CF
, the company remains either poised for further outperformance or a takeout candidate.