Analyst Actions: Gran Tierra Energy Estimates Lowered at Credit Suisse
Successful Flow Test at Moqueta-7: "Gran Tierra announced a successful flow test at Moqueta-7, with an aggregate rate of 1,146 bbls/d across four intervals. With the well's location believed to be near the western edges of the main block at Moqueta, the well is planned to be completed as a water injector to provide pressure support."
Next Moqueta Wells Coming in H1/13: "Initial drilling results at Moqueta-8 have yielded a total of 199 feet TVD of potential oil bearing reservoir over three intervals. Production testing is currently expected for January 2013. The next appraisal well, Moqueta-9, is currently planned to spud in February 2013 and will likely further define the ultimate field size at Moqueta, which remains unknown at this time."
Lowering Forecast with 2013 Guidance: "Prior to year end 2012, Gran Tierra provided production and capital guidance for 2013. For next year, total capital guidance was US$363 million, which could further expand if the company finds success in its unconventional oil project in Brazil. On the production front, the company guides 20,000 boe/d NAR, which includes a 10% contingency factor for potential future pipeline disruptions. We are lowering our 2013 & 2014 EPS estimates to $0.62 & $0.54 from $0.75 & $0.64, respectively."
Recommendation: "Despite persistent challenges with pipeline disruptions in 2012, Gran Tierra remains our preferred name in Colombia, given its strong balance sheet, a back-stop flagship asset at Costayaco and the adjacent growing Moqueta field, as well as material exploration prospects. The company's portfolio is well diversified and we currently maintain our Outperform rating and target price US$7.00."
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