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RBC capital came out with an Underperform call and a $6 price target on EGY. I really don't understand the logic on this. Here is an EX&P company that will be growing their production about 40% within the next 3 months if the Avouma project goes as planned. In another 14 to 15 months they will be adding the Ebouri discovery to production if all goes well which will bring total added production to close to 80%. Most companies are lucky to add 10% production yr.

 

This is a company that is only trading at ~12 x's TTM earnings and will be throwing off FCF at a greatly increased rate. They will be adding probably close to double to their proved reserves. All the value metrics on this stock will be getting better not worse. Add in the posibilities of disruption to supplies, etc, and the demand in the world for oil and the need for more discoveries and EGY's past performance. Now I know I have some questions about the Angolan agreement since they announced the intention to join OPEC but EGY still has other prospects. They have some still in the Etame block, the onshore Gabon concession, the North sea ,etc.

 

They do this at the same time they have raised the price targets and gave outperform calls on many of the drillers and suppliers to the E&P industry. I think that would mean that they don't see the price of fossil fuels going down but yet they call a $6 price on EGY. Somebody needs to explain this to me.Note the stock is down about 3.25% today. ? does this mean those selling are the Lemmings being led by the Pied Piper?

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