In a research report sent to investors today, Canaccord Genuity analyst Karl Chalabala maintained a Hold rating on Rex Energy (NASDAQ:REXX) with an $8.00 price target, as the company issued a fourth-quarter production update, beating consensus and Canaccord natural gas and NGL production estimates, and consensus oil estimates.
Chalabala wrote, “The key highlight in our view is defensive, as Rex layered on additional Dominion South hedges; 80% of volumes sold there now price at a $0.80 Mcf differential to Henry Hub, which are 70-75% of total volumes. At current strip pricing, this would result in a $0.43 Mcf uplift on price vs. naked Dominion South exposure and an 2015E CFPS uplift of $0.09 to $1.45 in our current model.”
The analyst continued, “Operationally, we view the 25% increased sand placement per foot in the Marcellus and Utica as a positive development that should yield materially increased recoveries based on similar increases by other operators.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Karl Chalabala has a total average return of -29.7% and a 25.0% success rate. Chalabala is ranked #3244 out of 3428 analysts.