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Operational Issues At Evi Add To Uncertainties; Lowering Estimates and Target Price to $10 (from $12).

Credit Suisse Commodity View: Credit Suisse has updated its commodity price view with the expectation that global growth moves above average over the coming months, suggesting that many markets are likely to tighten further. The rebound is seen being led by the US, with the worlds largest economy on the verge of a "self sustaining recovery"; China is also likely to strengthen modestly over the year.

Oil & Gas Price Outlook: Against this macro outlook, Credit Suisse expects the price of Brent oil to creep up further in H2 and over the medium term, with the risks firmly to the upside (supply disruptions). Long term Brent, however, is unchanged at $90. WTI's discount to Brent is expected to persist but close noticeably over 2013-2014 timeframe with new pipeline access. North American natural gas is forecast to remain oversupplied near term while the long term NYMEX price is now expected to be $4.50 ($5.50 previously). Please see the full report below for detail on price changes, including new forecasts for Canadian crude and natural gas prices.

Changes To Estimates: Incorporating our new oil and gas price forecasts as well as wider Canadian crude differentials, we have made the following changes to our estimates for Lone Pine. Our 2012 EPS/CFPS go from US$0.76/2.01 to US$0.52/1.69 while 2013 go from US$1.62/3.27 to US$1.57/3.21.

Target Price & Valuation: With lower near term cash flow on our revised price assumptions, we are revising our 12 month target for Lone Pine from US$12 to US$10. Our target equates to 4.0x 2013E EBIDAX, a modest premium to our 2P NAV estimate of US$9.28/sh but a substantial discount to our Risked NAV estimate of US$14.32/sh which incorporates value for unbooked resource on core Evi and Narraway/Ojay properties.

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