A Feb. 28 Cormark Securities research note indicated that Blackbird Energy Inc. (BBI:TSX.V) is approaching its "final derisking event," which is the release of test results from the northern 3-27-71-7W6 well, before the company transitions to "a high-growth junior," wrote analyst Garett Ursu.
Initial results, due out shortly, are expected to be "strong" and to confirm "a majority (>75%) of Blackbird's Pipestone acreage to be within the volatile oil window." Consequently, the well results are expected to have a "material and positive impact on the stock," just like those from Blackbird's eastern 2-20-70-6W6 Pipestone well did most recently. They showed a flow of 1,163 barrels of oil equivalent per day and a record 824 barrels per day of condensate.
Following announcement of the 3-27 results, Blackbird will shift Pipestone to "fill plant commitments in mid-2019," Ursu noted. During this phase, "we expect the market to begin to value Blackbird as a growth name rather than a land/net asset value play."
Ursu reiterated Cormark's positive take on Blackbird: "We continue to view the company as the most attractive small-cap Montney name in our universe with approaching catalysts, behind-pipe volumes and a large land base within the desirable liquids-rich Pipestone Montney fairway."
Cormark has a Buy rating and a CA$0.90 per share target price on Blackbird, whose stock is currently trading at around CA$0.38 per share.
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Disclosures from Cormark Securities, Blackbird Energy Inc., Morning Meeting Notes, Feb. 28, 2018
Analyst Disclosure:
We, Garett Ursu and Michael Mueller, hereby certify that the views expressed in this research report accurately reflect our personal views about the subject company(ies) and its (their) securities. We also certify that we have not been, and will not be receiving direct or indirect compensation in exchange for expressing the specific recommendation(s) in this report.
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