Analyst Jeremy Mccrea from BMO Capital maintained a Buy rating on Samoth Oilfield and keeping the price target at C$2.50.
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Jeremy Mccrea has given his Buy rating due to a combination of factors that highlight Samoth Oilfield’s potential for growth and profitability. The company has been at the forefront of innovative drilling techniques, which have significantly enhanced well profitability in shallow heavy oil basins. Despite a temporary decline in sentiment following the strategic disposition of certain assets, the company is now poised for growth with approximately 50% of inactive ARO sold and a return to drilling activities.
Furthermore, the company is experiencing strong well economics, with a twofold payout expected within three years. The recent operational updates, including non-core asset dispositions and a focus on the Bonnyville AB region, are expected to reduce operating expenses and improve overall efficiency. These strategic moves, combined with the promising type-curve improvements, suggest that Samoth Oilfield is well-positioned for above-average growth, justifying the Buy rating.