TICKERS: BBI

Analyst: New Well Data 'Confirm Positive Thesis and Upside'
Research Report

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Cormark Securities analyst Garret Ursu discussed this oil and gas E&P's recently released and upcoming well test results.

A Jan. 10 research report indicated that Blackbird Energy Inc. (BBI:TSX.V) announced initial production results from three development wells in the western block of its Pipestone property. "Peak 48-hour condensate production" was measured and an IP-30 rate of condensate determined for the two new wells and one recompletion well.

Garret Ursu, an analyst with Cormark Securities, noted that "the best results come from the 02/6-26-70-7W6 Upper Montney development well, [which] completed over 42 stages at ~1.5 tons per meter." That well delivered 701 barrels per day (701 bpd) and showed an IP-30 rate of 475 bpd. "The gas-to-condensate ratios for the well were very high at 574 and 441 barrels per million cubic feet, respectively," Ursu reported.

The 15-21-70-7W6 Upper Montney well produced 421 bpd. The IP-30 rate was 289 bpd. "The positive results suggest that previous Stage Completions issues did not affect the reservoir in the area," Ursu purported.

Well 2-28-70-7W6, in the Middle Montney, generated 412 bpd, and the IP-30 rate was 300 bpd.

About these core Montney well results, Ursu concluded they "confirm [the] positive thesis and upside" for Blackbird Energy, the former being that it offers "exposure to a highly prospective, contiguous, liquids-rich Montney position."

As for Blackbird's 28-day December production, it was an average 1,972 barrels of oil equivalent per day and 55% liquids, "effectively a maximum due to processing capacity at Gold Creek," Ursu noted. Higher initial production rates from the wells are expected once more fluid is recovered and longer lateral lengths are completed, he added.

Production results from four other wells are anticipated before the end of March. The property's northernmost well, 6-33-71-7W6, "could be Blackbird's best well," Ursu commented, due to the "presence of condensate in the shaker while drilling (highly irregular) and data gathered during drilling and completions."

About the upcoming findings, Ursu said, "With a high probability of success, we expect the release of results from the 6-33 and 2-20 wells to materially impact the stock before Q1/18E."

Blackbird is currently trading at around $0.33 per share, which compares to Cormark's price target of $0.90 per share for the company, which is rated Buy.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from Cormark Securities, Blackbird Energy Inc., Jan. 10, 2018

Analyst Certification: We, Garett Ursu and Michael Mueller, hereby certify that the views expressed in this research report accurately reflect my personal views about the subject company(ies) and its (their) securities. I also certify that I have not been, and will not be receiving direct or indirect compensation in exchange for expressing the specific recommendation(s) in this report.

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