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Parex Resources Estimates Lifted By CIBC After Q4, 'Sector Performer' Maintained

 March 15, 2012 03:08 PM

CIBC World Markets Inc. raised its estimates for Parex Resources Inc. (TSE:PXT) after the company's fourth quarter results. The brokerage maintained its "Sector Performer" rating and $11 price target on shares of PXT.

PXT reported its Q4 results with production and sales in line at 11,342 Bbl/d and 10,233 Bbl/d, respectively (both prereleased). The sales volume does not include about 281.5 MBbls delivered in Q4 and largely sold in January and February 2012. Current production is 12,500 Bbl/d.

Q4 cash flow per share was $0.53, above CIBC's $0.48 estimate and consensus of $0.45 due to higher realized prices ($102.15/Bbl versus the firm's $96.06/Bbl estimate) and lower-than-expected costs (combined op and transport costs of $22.87/Bbl versus $25.16/Bbl estimate).

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Q4 netbacks were $71.24/Bbl, up 6% sequential on higher realized pricing. Production expenses were up 13% sequential to $6.97/Bbl due to increased costs associated with initiating production at Sulawesi.

Unfortunately, stellar 2011 production growth came at the expense of reserves growth. The company is heavily dependent on exploration success to drive future growth. A 15+ well 2012 exploration program will be funded from cash flow.

The brokerage increased its 2012 cash flow per share estimate to $2.03 from $1.89 and its 2013 estimate to $1.09 from $0.99.

Parex Resources, formerly 1485196 Alberta Ltd., is a development-stage company engaged in the oil and natural gas exploration and development business in Trinidad and Tobago and Colombia.

PXT is trading down 1.02% at $6.82 on Thursday.

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