EV Energy Partners LP (
) 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
"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
"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
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