CIBC analyst Arthur Grayfer raised the company’s target price to $30 per share from $27.50 earlier, noting that the new target price is “supported by a sustainable yield, a war chest, and long-term growth visibility due to a very large land position.”
But the Calgary-based operator’s results were not enough to move analysts at RBC Capital Markets and National Bank Financial, who maintained their target price of $28 and $26, respectively, for the company.
The Calgary-based operator generates revenues from royalty-free land, has no debt on its books and expects cash flow exceeding $200 million over the next 12 months. Spun off from Encana Corp. in 2014, PrairieSky embarked on a $1.8 billion cash-and-share deal with Canadian Natural Resources Ltd to acquire its royalty lands last November.
The impact of the deal started to show in the first quarter, with production of 23,100 barrels of oil equivalent per day beating consensus estimate. In addition, non-royalty production revenues also generated $6.6 million, or around 15 per cent of the company’s first quarter cash flow.