CIBC Raises 2012 EPS Estimates On Fairborne Energy
Thursday, January 19, 2022 10:33 AM

CIBC World Markets Inc. lifted its full-year earnings per share estimates on Fairborne Energy Ltd. (TSX:FEL.TO) to $1.26 from $1.24.

The Calgary-based exploration and production company announced that it reached 2011 exit production of 16,700 Boe /d, in line with the company's guidance of 16,500 Boe/d-17,000 Boe/d and a strong increase over the company's Q3/11 average of 15,158 Boe/d.

"Fairborne's latest Wilrich well was placed on production at a restricted rate at 10 MMcf/d and has been producing at this rate since mid-December. This is the strongest well to-date in the Wilrich," CIBC analyst Adam Gill wrote. "In this note, we show Fairborne's continued well outperformance compared to predecessor wells."

Fairborne currently has one rig at Harlech, three at Marlboro and one at Sinclair. "As it stands, Fairborne is focused on its Wilrich plays; however, if gas prices continue to stay soft, we expect to see Fairborne focus more on the Cardium play as it has a higher associated liquids yield," Gill said.

Gill, who has a "Sector Performer" rating and price target of $5.50 on the stock, said the near-term challenges of a weak gas price environment will continue to weigh in on the stock in the next while.

The stock, which has been trading in the 52-week range between $2.35 and $5.65, is trading 2.72 percent higher at $2.64 on Thursday.