Ann: Sugarkane Field Operations and Production Up, page-6

re: Ann: Sugarkane Field Operations and Produ... latest from macquarie

Price catalyst
�� 12-month price target: C$4.25 based on an 11.5x 2012 EV/DACF methodology.
�� Catalyst: Continued drilling results from Sugarkane AMI
Action and recommendation
�� Recent well data is in line with our Mid Case type curve, though with a
considerably higher liquids weighting. With no debt and production ramping up
quickly, Aurora is one of the highest cashflow-growth names in our coverage. We
will continue to monitor OGRs as new data becomes available, but we reiterate
our view that the company is growing into its multiples via the production coming
on-stream through 2012. Given its recent share price pullback, our target price
implies an upside of 28%. Given Aurora?s pure-play exposure to the sweet spot of
the Eagle Ford shales, we are making a relative valuation call and upgrading our
rating to Outperform from Neutral.