(MENAFN- ProactiveInvestors) 's () Montney results are solid according to analysts at Dundee Capital Markets who reiterated their buy recommendation and price target of $2.00 per share after the junior energy company lowered its capital and production forecasts for 2015.
Management is now projecting first quarter production to be in the range of 12500 to 13000 barrels of oil equivalent per day (boe/d) down from previous guidance of 13500 boe/d.
The company decreased its capital program to $22 million from $45 million during the quarter due to weaker energy prices and a one week shutdown of the Simonette field tied to the commissioning of the expansion of its 100 million cubic feet per day facility.
Despite the lower guidance Dundee said that the balance sheet is in good shape with estimates for total net debt of $85 million at the end of the first quarter against total borrowing capacity of $195 million. Cequence also has about 40 percent of its first quarter production hedged at $4.22 mcf and 30 percent of the rest of 2015 at $4.11 per mcf.
Dundee also noted three Montney horizontal wells from the 1-32 pad which averaged IP30 rates of 1100 boe/d while two other Montney wells from the 12-26 pad averaged restricted rates of 875 boe/d over the first 16 days of production.
"These collective results are slightly ahead of our type curve Montney IP30 at 903 boe/d (85% gas)" Dundee said in its note released earlier Wednesday.
"Three more Montney wells have been completed on the 1-32 pad which will be onstream in February and another 2 gross (1 net) Montney wells from the 15-15 pad will be completed in February."
For 2014 the company's average production was 11000 boe/d -- in line with Dundee's estimates and previous guidance.
Cequence is focused on Montney and Cretaceous liquids-rich gas in the Simonette area of the Deep Basin. Shares were down 6 cents at 90 Canadian cents in Toronto Wednesday afternoon. The stock has fallen nearly 52 percent in the last year.
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