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Bonanza Creek Energy (BCEI) Initiated At 'Buy' By Brean Capital; PT $42

 February 22, 2013 02:55 PM


(By Balachander) Bonanza Creek Energy Inc. (NYSE: BCEI) shares were initiated with a "Buy" rating and price target of $42 by Brean Capital LLC.

Bonanza Creek is an independent exploration and production company focused on onshore oil and liquids-rich plays in the Rocky Mountain and Mid-Continent regions of the United States.

The brokerage sees multiple catalysts on the horizon that will drive share price appreciation including: results from the company's first extended reach lateral and Niobrara "C" Bench wells in early 2013; multiple test wells in the Codell and "C" Bench in mid-2013; Niobrara "B" Bench 40-acre down spacing in late 2013; and Cotton Valley 5-acre down spacing in late 2013.

Brean Capital said results from the company's first test well should provide an indication of the "C" Bench's potential. The brokerage expects to hear results from both wells in early 2013.

The company drilled 1 successful Codell well in 2012. Additional production data from the 4 wells scheduled for 2013 should affirm the play's potential. Likewise, additional results from the Niobrara "C" wells scheduled for 2013 will confirm if the play works, the brokerage wrote.

Brean Capital is of the view that 40-acre down spacing for the Niobrara "B" Bench is a major catalyst.

The stock, which has been trading in the 52-week range of $14.52 to $35.25, rose 2.28 percent to trade at $33.62 on Friday.

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