Veren Maintained at Buy at TPH as Raises C$400 Million in an Asset Sale; Price Target at C$15.00

Tudor, Pickering, Holt on Monday maintained its buy rating on the shares of Veren (VRN.TO) with a C$15.00 price target after the Western Canadian oil and gas producer said it is raising C$400 million from the sale of some Alberta assets.

"In what we view as a positive press release this morning, VRN provided several updates headlined by a transaction that will bring in C$400MM in proceeds, resulting from the sale of primarily all of the company's working interest in four oil battery sites. Sensitizing our model shows that, upon closing (expected Q4'24), the company would quicken its path to its C$2.2B net debt target (at a $60 WTI deck) by ~two quarters (TPHe ~mid'25, with YE'24 net debt at current prices expected to be C$2.4B). The four oil battery sites associated with the deal were previously acquired as part of the HHRS transaction, with VRN also having ownership of an oil battery site at Gold Creek West. After the transaction closes, VRN will (i) retain operatorship at the oil battery sites associated with this transaction and (ii) gain operatorship of four oil battery sites that are currently operated by buyer, Pembina Gas Infrastructure (PGI; JV between Pembina and KKR). Additionally, the company renegotiated multiple prior agreements that will result in lower fees go-forward, locked in 100% of gas processing capacity at the Patterson Creek Gas Plant, entered into a TOP commitment for 15-years at the oil battery sites (C$35MM net annual fee), and retains the option to design / construct / operate certain future infrastructure assets with PGI funding up to C$300MM," analyst Jeoffrey Lambujon wrote.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

Price: 8.71, Change: +0.03, Percent Change: +0.29