Q: hi folks...opinion on Q results for Tamarek tve/t...good & bad...stock hit new 52 wk low on results....Buy/hold/sell...thanks, jb
5i Research Answer:
Sales were above estimates but earnings were weaker than expected. Production estimates were cut to 67,000 to 71,000 b/d vs estimates of 70,000. Average production was just under 68,000, which was up 64%. A pipeline outage reduced production by 1,000. A wider than expected differential impacted cash flow negatively, but TVE noted the Delta acquisition is being integrated well and synergies are strating. Debt rose $800M with the acquisition. We would not call it a great quarter but the lower price reflects this somewhat. We still expect growth and the valuation is very attractive, but so far this one is not working out so well. We see it as a HOLD.