UPDATE: Canaccord Genuity Starts Energy XXI (EXXI) at Buy, Strong Properties and Consistent Cash Generator

October 4, 2012 7:35 AM EDT
Get Alerts EXXI Hot Sheet
Price: $0.13 --0%

Rating Summary:
    7 Buy, 10 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 14 | Down: 24 | New: 12
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(Updated - October 4, 2012 10:18 AM EDT)

Shares of Energy XXI (NASDAQ: EXXI) are higher early Thursday after getting a new fan.

Canaccord Genuity initiated coverage on EXXI Thursday with a Buy rating and $44 price target, suggesting 32 percent upside.

"We like EXXI for its oil-weighted asset base, consistent cash generation, and potential upside from its ultra-deep program, which is getting closer to becoming a contributor to reserves and production," analyst Stephen Berman said.

The company continues to exploit solid core properties acquired from Exxon in December 2011 with most results to date exceeding expectation. It is also a consistent cash generator with a record $874 million in EBITDA in fiscal 2012 which allowed it to slash net debt by over $180 million and take the long-term net debt to capital ratio from 53% down to 39%.

Regular updates on the Blackbeard, Lafitte, and Davy Jones projects, operated by McMoRan Exploration Co., have often been catalysts for EXXI shares, the firm notes. "Workover activities continue at Davy Jones #1, and the company’s expectations are for these operations to enable a measurable flow rate very soon, followed by commercial production shortly thereafter."

For an analyst ratings summary and ratings history on Energy XXI click here. For more ratings news on Energy XXI click here.

Shares of Energy XXI closed at $33.30 yesterday.

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