Current PQ Stock Info

PetroQuest is targeting record production growth in 2017
Today’s announcement from PetroQuest Energy (ticker: PQ) delivered a clear signal that PetroQuest will hit the accelerator on growth starting now, anchored by a Texas drilling program that could deliver an attractive 2017 for the GOM/East Texas-focused E&P headquartered in Lafayette, Louisiana.

PQ Manager of Corporate Communications Matt Quantz was in a positive disposition this morning following the company’s announcement that it has finalized the east Texas joint venture (JV) ag...

Analyst Commentary

From CapitalOne Securities
PQ Enters East Texas JV
$3.19, Overweight, $5.00 Target, Tullis
· Positive since the agreement should allow PQ to benefit from drilling efficiencies from running a continuous Cotton Valley drilling program that should also help generate solid y/y production growth. As expected, PQ has struck a JV in the Cotton Valley. The partner group will receive a 20% WI in the project area consisting of 6,400 gross Cotton Valley acres located in Panola County in exchange for $12MM in participation fees plus 24% D&C costs with a potential 5% WI increase for the existing partner (for 7% drilling cost share). The JV will initially focus on drilling 47 wells with an average lateral length of 5,600 ft beginning with the first well spudding in December. The JV partners have a one-time election to continue participating in the program following the 7th well.
· PQ expects to drill and complete 8 – 10 gross wells via the JV in 2017 (PQ would hold 75% WI if all partners & working interest owner participate in all wells for a 69% D&C cost participation). This would work out to slightly below the 8.4 net wells that we currently estimate for PQ in the Cotton Valley next year, but we also did not factor in the $12MM participation fee or the expected 6% drilling cost carry.

From SGS Energy Research
· PQ comments – Announces Cotton Valley JV; re-starting Cotton Valley D&C in December, setting up for significant FY17 production growth ($3.19; Buy; $7.00 PT): Cotton Valley JV covering up to 6,400 gross acres provides a creative solution to enhance liquidity and jump-start a significant production growth trajectory. Under the terms of the agreement, the JV partners will pay $12MM in participation fees over the first 12 months and front 24% of D&C costs to acquire a 20% working interest. In FY17, PQ plans to drill 8-10 gross wells under the JV – with momentum for Cotton Valley D&C and a high-impact/low-cost recompletion at Thunder Bayou pegged for early FY17 (which is expected to ultimately produced >22 MMcfepd, or put differently, >50% of PQ’s Q4 guidance); we see PQ poised for strong FY17 production growth from within cash flow (potential for ~50%+ growth exit/exit). Also nice to see the deal done at >$9K/acre which provides a positive read to PQ’s Cotton Valley position.  

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