Alright into December with a bang !! OPEC is now out of the way...

Alright into December with a bang !!

OPEC is now out of the way and as expected provided a very bullish production cut to have all eyes on the energy sector into 2017. I believe we close the year out above $55 in crude and stabilise between 55-65 into 2017.

How does this leave Sundance and what to expect into December ? News flow has been quiet but that is about to change.

As highlighted in his Q3 investor address CEO McCrady said that he would “providing production and capital expenditure guidance for Q416 and the full year 2017 in a press release in December”. I think this update will provide a very bullish guidance that reminds the market of the impressive position we are in going into 2017.

Why do I think the update is going to be a punchy one ?? In the wake of Q3 CEO Eric McCrady commented that the quarter “represented a return to activity levels that we believe will provide substantial growth in production and cash flow for Sundance for the remainder of 2016 and into 2017” .. As a reminder 3Q16 production was circa 6,100 boepd, Scotia believes that increases ~60% to 9,500 Boepd in 4Q16 !!!!!!

In an interview during November we were reminded that the company was close to completion on the sale of their Oklahoma assets that will be used to pay down debt. Look for confirmation of this shortly, from what I have read we should be expecting something in the vicinity of 15-20m USD for these assets. Scotia also thinks that the sale adds to the liquidity for bolt-on assets/acceleration should prices warrant – which they now do post OPEC !

Into 2017 Sundance will be ramping up their marketing program to further the awareness of the Company and “will begin hosting quarterly conference calls in 2017 to provide consistent and timely updates regarding the Company’s progress and results congruent with other US reporting companies” … This will ensure steady updates on production and constant news flow to keep investors engaged.

All in all if we get the boost to production in Q42016 that we all know is possible then we should get a nice bounce in SP into Christmas. As Scotia points out the 9,500 boepd “puts them on a ~$100 MM EBITDA run rate for 2017 based on our $54 oil deck”. This oil deck they talk about was pre OPEC / Non-OPEC taking 1.8mio barrels per day out of the market.

Best of luck all holders