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Mackie repeats ‘buy’ on ‘crazy cheap’ Prairie Provident Resources

.PPR’s assets are its Evi, Princess and Wheatland operations - all with development potential.
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The broker said: "PPR has a large inventory of low risk, low cost Mannville locations that can fuel growth for many years. “

Broker Mackie has repeated a 'buy' rating on Alberta-focused Prairie Provident Resources Inc (CVE:PPR), describing the stock as 'crazy cheap'.

It comes after the oiler  completed an $8 million financing in conjunction with the acquisition of around 1,100 boepd (barrels of oil equivalent per day) of low declined high netback production next to its Evi property core area.

Analyst Bill Newman notes that with this, Prairie becomes a much larger company with around 6,500 boepd and 2P reserves of 20.2 million boe (barrels of oil equivalent) and the broker expects a re-rating of the stock.

PPR’s assets are its Evi, Princess and Wheatland operations - all with development potential.

Evi is the cash flow engine for the company which will be re-invested into drilling the Mannville on the Wheatland & Princes core areas, notes Newman in the note.

Newman added: "PPR has a large inventory of low risk, low cost Mannville locations that can fuel growth for many years.

"With the completion of the acquisition and increased cash flow we believe the company is self-funding. Subsequent to the financing and expanded credit line, PPR also maintains financial flexibly."

Newman added that the company is highly undervalued, and the broker expect a re-rating of the stock as the company hits production targets in addition to a valuation multiple expansion for a larger company.

Mackie targets $2.00 for the shares. The current price is $0.63.

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