In an Aug. 27 research note, analyst John White reported that ROTH Capital Partners raised its Q3/19 production estimate for Lonestar Resources US Inc. (LONE:NASDAQ), "based on guidance which is supported by continuing strong well completions."
ROTH also revised its oil and gas price deck, which led to it lowering its price target on Buy-rated Lonestar to $8 per share from $11 per share. The energy company's current share price is $2.66.
White detailed ROTH's changes to its model on Lonestar, resulting from the energy company having been "consistently guiding production higher and operating costs lower."
ROTH increased its Q3/19 production projection by 11%, to 17,170 barrels of oil equivalent per day (17,170 boe/day) from 15,505 boe/day. ROTH also raised its projected cash flow per share for Q3/19 to $1.02, up from $0.84. Its new EBITDA estimate is $35 million, up from $32.9 million.
As for changes to its near- and medium-term oil price estimates, ROTH lowered its West Texas Intermediate (WTE) estimates for Q3/19 to $56 per barrel ($56/bbl) from $57 and for Q4/19, to $54/bbl from $57, White relayed.
For the Henry Hub price in Q3/19, ROTH predicts $2.20 per million British thermal units (2.20/MMBtu) versus $2.20 and in Q4/19, $2.25/MMBtu versus $2.40.
As for 2020 forecasts, ROTH now expects a WTI crude oil price of $52.25/bbl versus $54.75 and a Henry Hub price of $2.40/MMBtu as opposed to $2.49.
ROTH has a Buy rating on Lonestar Resources.
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Disclosures from ROTH Capital Partners, Lonestar Resources US Inc., Company Note, August 27, 2019
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of Lonestar Resources US Inc. and as such, buys and sells from customers on a principal basis.
Shares of Lonestar Resources US Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
