Recent Update   Text as of 7NOV12
. Angle Energy reported Q3/12 results.
 
. Q3 in Line. Angle reported Q3 volumes of 14.2 mboe/d (prev. announced) and CFPS
of $0.24, in line with our forecast (consensus at $0.25). During the quarter,
NGL drilled and rig released 10 (7.1 net) wells, with 8 (5.1 net) targeting
Cardium oil. To date in 2012, NGL has drilled 35 hz wells, including 17 net in
the Harmattan Cardium project. Capex for 2012 has been increased to $161M-163M
in order to accelerate NGL's Cardium projects at Harmattan and Edson, with the
impact of additional capital to appear in 2013 operating results.    
 
. Harmattan is Encouraging. We continue to like the Harmattan Cardium play, which
will remain the focus of Angle's capital investment into next year. Current
production is now 2,162 boe/d from 19 wells, with an undrilled inventory of 176
wells at 4 wells/section. Angle's recent bank line increase to $250M (from
$220M) acts as a vote of confidence in recent results from the play. Investment
plans include a 4,000 bbl/d battery to handle future growth. 
 
. Our Take. We are maintaining our positive bias on NGL, as we think the
transition to a higher oil weighting is well underway, and forecast good cash
flow growth on account of the higher liquids weighting. NGL currently trades at
4.7x 2013E EV/DACF, which we view as attractive.
 
. We maintain our 1-SO rating and our $6.75 one-year target price.