Scotia thoughts on Qtrly Results

Sundance Energy $13.86 (FS): 3Q16 Results

Quick Take: Good quarter  for Sundance as production was in line with our estimates, while costs were lower and pricing was better.

During  the  Quarter, ~10  net  wells  were  added  in  the  Eagle  Ford,  and  Sundance  ended  the  quarter  with  ~$20  MM  in  cash.

Operationally,  the  Company  continues  to  execute  as  SEA  brought  online  3.0  net  Dimmit  County  wells  and  2.7  net  McMullen


County wells along with 3.6 net non-op Eagle Ford wells.  Regarding the re-frac agreement with SLB, the Company re-frac’d 5 wells in  the  quarter.

Sundance  continues  to  be  the  top-pick  in  our  group  as  the  Company  trades  at  3.0x  2017  EBITDA,  and we  expect sequential growth of ~50% in 4Q over 3Q which provides a near term catalyst for the stock. We maintain our Focus Stock rating.

3Q16 Results: SNDE reported 3Q16 EPS and CFPS of ($0.08) and $0.64 vs. our estimate of ($0.09) and $0.63 and consensus at  ($0.15) and $0.55, respectively.  

While production was in line with our estimate, EPS and CFPS beat our estimates on lower LOEs and better realizations.