Wells Fargo Upgrades EV Energy Partners (EVEP) to Outperform, Raises Valuation Range by 37%
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Price: $0.13 --0%
Rating Summary:
4 Buy, 5 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
4 Buy, 5 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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Wells Fargo upgraded shares of EV Energy Partners (NASDAQ: EVEP) to an Outperform rating and raised its price valuation range from $54-$57 to $75-$78.
Management values its 1.25 million acres at Chesapeake at $15-$20 billion which reflects a value of 12-$16 thousand an acre. The company highlighted that economics of the Utica were superior to the Eagle Ford, which has sold at $7-$9 thousand and acre in the past. EVEP owns 150 thousand net acres in the Utica and a 7.5 percent royalty override on 80 thousand additional acres.
EVEP anticipates on increasing its rig count from its current 5 rigs to 8 by year end. It also is forecasting a total of 16-20 rigs by the end of 2012 and 40 rigs by the end of 2014.
An analyst at Wells Fargo comments, "EVEP's growth will likely be driven by value generated from the monetization of its acreage position in the emerging Utica Shale. We calculate the market is crediting EVEP with about $19 per unit of Utica upside. In comparison, we estimate the play could be worth $33 per unit. Hence, risk/reward appears favorable, in our view. About 75% of EVEP's distribution is tax deferred."
The firm is reiterating its 2011 and 2012 DCF estimates of $3.97 and $4.40. The company is expected to announce it second quarter results on August 8, 2011.
For more ratings news on EV Energy Partners click here and for the rating history of EV Energy Partners click here.
Shares of EV Energy Partners closed at $63.87 yesterday.
Management values its 1.25 million acres at Chesapeake at $15-$20 billion which reflects a value of 12-$16 thousand an acre. The company highlighted that economics of the Utica were superior to the Eagle Ford, which has sold at $7-$9 thousand and acre in the past. EVEP owns 150 thousand net acres in the Utica and a 7.5 percent royalty override on 80 thousand additional acres.
EVEP anticipates on increasing its rig count from its current 5 rigs to 8 by year end. It also is forecasting a total of 16-20 rigs by the end of 2012 and 40 rigs by the end of 2014.
An analyst at Wells Fargo comments, "EVEP's growth will likely be driven by value generated from the monetization of its acreage position in the emerging Utica Shale. We calculate the market is crediting EVEP with about $19 per unit of Utica upside. In comparison, we estimate the play could be worth $33 per unit. Hence, risk/reward appears favorable, in our view. About 75% of EVEP's distribution is tax deferred."
The firm is reiterating its 2011 and 2012 DCF estimates of $3.97 and $4.40. The company is expected to announce it second quarter results on August 8, 2011.
For more ratings news on EV Energy Partners click here and for the rating history of EV Energy Partners click here.
Shares of EV Energy Partners closed at $63.87 yesterday.
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