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Evolution Petroleum (EPM) Initiated As 'Buy' By Brean Capital; PT $11

 December 06, 2012 02:47 PM

(By Balachander) Evolution Petroleum Corp. (NYSEAMEX: EPM) shares were initiated with a "Buy" rating and price target of $11 by Brean Capital LLC.

Evolution Petroleum applies modern technology and engineering expertise to known oil and gas resources onshore in the United States, the brokerage said.

Three catalysts on the horizon are: initial well results from EPM's Mississippi Lime Play, increasing oil production at the Delhi Field, and additional GARP results, Brean wrote.

The brokerage expects well results from Evolution's initial Mississippi Lime wells are imminent. In addition, Brean said it expects to see increasing oil production at Delhi in the 2Q:F13 results.

[Related -Dividend Scan: MHR, WSO, ANH, EPM, AFG, LTC]

Brean noted that GARP is a low-cost technology that improves production and ultimate recoveries from mature wells. GARP technology increased production to 55-60 gross (27-30 net) BOEPD from marginal levels on four installations.

"While GARP is not a major driver at the moment, it could add meaningful production down the road," the brokerage wrote.

The company's producing assets include a CO2-EOR project with growing production in Louisiana's Delhi Field, and producing wells and proved drilling locations in the Giddings Field of Central Texas and Lopez Field in South Texas.

The stock, which has been trading in the 52-week range of $7.48 to $10.14, rose 1.28 percent to trade at $7.92 on Thursday.

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