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Analyst Actions: Credit Suisse Revises Connacher Estimates But Maintains $1.25 Target Price

Brent price forecast unchanged but NYMEX weakness could persist near-term. "Credit Suisse has updated its commodity price view to reflect downward adjustment to NYMEX natural gas prices and a narrower differential between WTI and Brent. The Brent oil price forecast itself is unchanged. For NYMEX gas, Credit Suisse expects weakness to persist near-term as production takes time to fall in response to falling rig counts (mitigating factors include wells behind pipe, liquids drilling and efficiency gains). The long term view of the NYMEX gas price is unchanged at $5.50. The Brent forecast continues to reflect a 3.4% global GDP growth rate for 2012 with downside demand risk balanced by real supply risk across MENA and other significant producers (e.g., Venezuela, Russia, Nigeria). Please see our full report for complete details of changes, including for Edmonton Par, AECO and the WCS differential."

Revising Connacher Estimates After New Oil Price Forecasts. "Incorporating our new oil and gas price forecasts, we have made the following changes to full year estimates for Connacher. Our 2011 operating EPS/CFPS go from C$(0.15)/0.09 to C$(0.13)/0.11 while 2012 go from C$(0.03)/0.18 to C$(0.01)/0.23. Our 2013 EPS estimate goes from C$0.13 to C$0.11."

Maintaining Target of C$1.25. "With the long-term oil price view unchanged, we are maintaining our target of C$1.25 at this time. Our target reflects our sum-of-parts value and equates to 6.00x 2013E EBIDAX of C$243 million. While the recent confidential and unsolicited proposal to acquire the company's shares highlights the value disconnect between equity and asset value that exists in the market today, fundamentally, we believe Connacher will need to execute on joint venture plans and other liquidity and balance sheet initiatives to close the value gap to our target."

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

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

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