Analyst Actions: EV Energy Partners Reaffirmed with Outperform Rating at Credit Suisse - Shares Jump 7%


EV Energy Partners LP ( EVEP ) is up 6.7% at $4.96 after analysts at Credit Suisse reiterated the company's stock with an Outperform rating.

Credit Suisse Says: "Time to Do Some Math; Reiterate Outperform"

"Reiterate Outperform - Getting the Utica for Free: While investors are clearly losing patience with the company given its lack of a Utica monetization, we believe EVEP is now trading below the value of its base business ($46/unit). Given the lack of clarity, we believe it is important to focus on what we do know which is that EVEP is a high-quality upstream MLP with a proven track record, a supportive sponsor, and differentiated high-multiple growth assets (midstream + ORRI). While the timing/proceeds of a Utica monetization remain unclear, we do believe the acres have value and conservatively ascribe $11/unit of value to its marketed package. All told, we believe EVEP's 7.3% current yield (supported by underlying asset value) plus embedded Utica optionality represent one of the most compelling investment opportunities across our coverage universe.

"Base Business = $46/unit: Our review of the company's underlying oil & gas assets, midstream assets and ORRI suggest EVEP is worth $46/unit excluding any value from its Utica package. Given EVEP's quality of management and proven track record, we are confident in the company's ability to execute its growth through acquisition model.

"Conservative Utica Assumptions = $11/unit: After reviewing reported Utica well results and estimating the breakdown of EVEP's acreage across the liquids-rich and oil windows, we ascribe $11/unit of value to its ~104k marketed acres. Furthermore, given the low expectations for oil window values and the significant concentration of acres within the oil window, we believe it is important to consider the positively skewed nature of this option."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: EVEP

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