Birchcliff Energy Receives a Buy from Canaccord Genuity

By Jason Carr

Birchcliff Energy (TSX: BIR), the Materials sector company was revisited today, and remains undervalued for at least one analyst on the street. Canaccord Genuity’s analyst Dennis Fong reiterates their Buy rating on the shares, with a C$9 price target.

Fong noted:

“We are reiterating our BUY rating and C$9.00 price target on Birchcliff Energy after accompanying management on a non-deal roadshow through two American cities last week. We continue to view the resource quality Birchcliff controls as being underpinned by its low operating costs from ownership of infrastructure, relatively low corporate decline, egress optionality and its ability to allocate capital between natural gas and oil. We continue to believe this positions Birchcliff versus its dry gas peers with the flexibility to adapt in what has been a challenging gas price environment. Highlights of the trip Restricting wells leads to lower corporate decline. Our analysis of Montney wells the company drills shows that the decline profile is ~30% in the first year vs. the more typical US shale well which can be as high as 60%.”

According to, Fong is a 4-star analyst with an average return of 7.0% and a 56.3% success rate. Fong covers the Basic Materials sector, focusing on stocks such as Athabasca Oil Corporation, Whiting Petroleum Corp, and Freehold Royalties Ltd.

Currently, the analyst consensus on Birchcliff Energy is Strong Buy and the average price target is C$9, representing a 69.5% upside.

In a report issued on October 2, AltaCorp Captial also reiterated a Buy rating on the stock with a C$8.50 price target.

The company has a one-year high of C$10.50 and a one-year low of C$4.96. Currently, Birchcliff Energy has an average volume of 1.18M.

Birchcliff Energy Ltd. engages in the exploration, development and production of oil and natural gas. It produces and sells light crude oil, natural gas and natural gas liquids. The company was founded by Myles R. Bosman, Gordon W. Cameron, Bruno P. Geremia, Laurence A. Shaw, Werner A. Siemens, James W. Surbey and A.

The company’s shares closed on Thursday at C$5.31, close to its 52-week low of C$4.96.