Scotia Capital has upped its stock price target for Kelt Exploration Ltd.
, Stock Forum
) following news that the company has struck a deal to acquire a private Canadian energy firm with crude oil and natural gas assets near Kelt's operations in west central Alberta.
The assets being acquired include net production estimated at 2,300 barrels of energy per day (70% oil and 30% gas).
Under the deal, Kelt is paying $165 million (4.5 million shares plus $107 million cash) for assets that are located 18 miles south of Kelt’s Pouce Coupe/Spirit River core area and include 51.5 net sections of land and 56 net drilling locations.
Meanwhile, Scotia Capital analyst Cameron Bean said he is maintaining a sector outperform rating on Kelt, while raising his target to $17 from $16 on the accretion from the deal.