Seven Generations Energy (VII-T) Not even higher-than-expected cash flow and promising early results from the Nest 3 area could keep the stock from hitting all-time lows. For the fourth quarter, Seven Generations' cash flow came to $1.05 a share, exceeding analysts' predictions of $1.00 a share. Production matched predictions at 208,100 barrels of oil equivalent a day. The company also highlighted results of new wells in its early-stage Nest 3 area. These wells are producing roughly the volumes that the company expected, but with 20-per-cent-higher proportions of valuable condensate.
The update was well received by analysts, such as Canaccord Genuity's Anthony Petrucci and Scotia Capital's Jason Bouvier, who reiterated their respective price targets of $11 and $12 (more than double today's close of $5.52). Investors remained gloomy. As with many companies, the big concern is how well Seven Generations will weather low oil and gas prices if they keep plunging deeper into bear country. The 2020 budget that Seven Generations released in November was based on $50 (U.S.) WTI for oil and $2.50 (U.S.) gas. That was fairly conservative at the time -- WTI was trading above $57 (U.S.) and gas was around $2.80 (U.S.) -- and indeed investors frowned on the cautious guidance. This calls for Seven Generations to spend $1.1-billion and produce 200,000 to 205,000 barrels a day, flat with the 2019 average of 203,000. These days oil and gas prices are around $45 (U.S.) and $1.70 (U.S.), respectively. Seven Generations is nonetheless confident in this guidance and repeated it in the new financials.
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