SEA 0.00% 16.5¢ sundance energy australia limited

Hey guys, Nothing we didn't already know in this post but just...

  1. 211 Posts.
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    Hey guys,

    Nothing we didn't already know in this post but just keeping the news ticking over incase anyone missed the little mention that Sundance got in Scotia Howard Weils latest Oil/Gas Update released Oct 6th. The report broadly downgraded their calls in oil and gas slightly over the next 2/3 years. Price of oil for 2017 goes from 60 to 54. Price of oil for 2018 goes from 65 to 60.

    What was interesting is that amongst the downgrades they also applied downgrades to a few stock price targets. Sundance however was not one of these and they made special mention again that it remains part of their 'Focus Stock' groups. They only have 3 Focus Stocks at present. Sundance, Callon and Devon. Focus stocks represent the analysts best ideas; stocks in the FS group are expected to significantly outperform the average 12mnth total return of analysts coverage universe.

    Back to SHW report they have recently highlighted the severe undervalued nature of the stock and reiterated this in saying; "Sundance (SNDE) is a special situation E&P stock. An ADR recently began trading on Sept 1st, and its 3x 2017 EBITDA multiple is the lowest in the Scotia Howard Weil coverage universe despite attractive Eagle Ford inventory. Further, we estimate the debt to EBTIDA is just 1.5x next year with YoY production growth of 55%"

    Stock price target remains at $28 which off todays current AUD spot price is calling for SEA at 37 cents in 12 months.

    I think we are due for a production update soon from the company which should show they are well on track to reach their year end 10,000 boed exit rate. With the rally in oil playing perfectly into the increased production numbers. We haven't heard much in relation to the Oklahoma asset sale either which was due around this time so plenty to keep your eyes and ears peeled for into Oct/Nov. This combined with a joint agreement between OPEC/Non-OPEC late Nov should really set us up nicely for a huge push into year end and a great base for what will be a massive year in 2017.

    Onwards and upwards, Ben
 
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