11.05
Vero has completed its recent $12.6MM flow-through financing, whereby the
company issued 2.2MM common shares at $5.65/share. In addition, the
company announced the sale of 350 Boe/d of non-core assets for $15.2MM
(prior to adjustments), which is expected to close during Q4/09.
Subsequent to the financing, Vero reported Q3/09 results with production of
6,610 Boe/d and cash flow of $0.09/share, both in line with our estimates
(at 6,600 Boe/d and $0.09/share). Capex of $5.0MM (net of drilling
incentives) in Q3/09 included 1 (100% WI) Hz well, which is on-stream.
Vero’s winter drilling program includes 5 net Hz wells in Q4/09 & 9 net Hz
wells in Q1/10.
Vero currently trades at a 2010 EV/DACF multiple of 3.5x & at a 40% NAV
discount (vs. the group at 5.5x/-18%).
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