Join        Login             Stock Quote

TORC Oil & Gas Initiated At 'Sector Outperformer' By CIBC, $3.50 PT

 December 04, 2012 01:59 PM

(By Balaseshan) CIBC World Markets Inc. analyst Adam Gill initiated coverage of TORC Oil & Gas Ltd. (TSE: TOG) with a "sector outperformer" rating and $3.50 price target.

Gill said TORC is a junior E&P focused on two tight oil plays in west central and southern Alberta. The core development play is the Cardium Trend, which will attract the bulk of the 2013 capital budget.

The other opportunity is the Alberta Bakken, which is in its early stages, but has sizable potential, the analyst noted. TORC is a combination of the old TORC and Vero Energy that consolidated TORC's position in the Cardium.

Gill said TORC's management team has a solid track record of providing value creation for shareholders, most recently selling Result Energy at a 50% premium to its last financing before acquisition.

[Related -Savings Glut and Financial Imbalances]

The company has a solid financial position heading into 2013, exiting 2012 with a cash position of over $40 million. Given a solid netback on development drilling, the analyst expects a relatively lower draw on the bank line in 2013, exiting the year with discounted cash flow at 0.6 times versus the group at 2.3 times.

Gill said TORC trades at 9.4 times his 2013 equity value/debt-adjusted cash flow (DACF) estimate and 82% of his risked net asset value versus the group averages of 7.3 times and 83%, respectively.

TOG is trading down 2.61% at $2.24 on Tuesday.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageSavings Glut and Financial Imbalances

Martin Wolf in today's Financial Times discusses the reasons for low interest rates and suggests some read on...

article imageA Dividend Aristocrat Is Now On Sale

The bear market investors have been dreading is already here for many individual stocks. While the S&P 500 read on...

article imageTwo Picks to Play Defense in a Slowing Economy

Is the economy slowing? Last Thursday the Institute for Supply Management (ISM) reported that its read on...

article imageUS Jobless Claims Fall, Moving Closer To Multi-Decade Low… Again

US jobless claims continue to cast a positive glow on the outlook for the labor market. Today’s weekly read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.