viewPrairie Provident Resources

Prairie Provident is a potential takeover target, reckons Mackie

When it completes the Marquee Energy acquisition, expected to close next month, the firm will be a much larger company

Broker Mackie has repeated a buy with a $2 price target

Broker Mackie reckons junior oiler Prairie Provident Resources Inc (TSE:PPR) is a takeover target given the current valuation and its assets.

It rates the stock a buy with a $2 price target.

When it completes the previously flagged Marquee Energy acquisition, expected to close next month, the firm will be a much larger company with around 7,700 boe/d, an increase of around 34%, notes analyst Bill Newman.

READ: Prairie Provident Resources closes $5.5M in financings

It will also hold proven plus probable reserves (2P) reserves of 42.2 million boe, an increase of around 110%.

"The acquisition is accretive on a reserves, NAV and cash flow bases, and PPR is even more attractive on all valuation metrics," the analyst adds.

Newman also notes the read-across of the Surge Energy/ Mount Bastion Oil and Gas Corp transaction - the former buying the latter for $320 million.

The acquisition of MBOG for $320 million implies a potential value of $1.25 per share for Prairie, reckons Newman.

Surge pays $58,182 per flowing boe (barrel of oil equivalent) and $12.80/boe for 2P reserves.

"At the current market price, PPR is trading at approximately $21,300 per flowing barrel and an EV/2P reserves value of $3.97/boe."

Mackie concludes that the company remains highly undervalued currently trading at 13.2% of its core NAV (net asset value) estimate of $2.65/fd (fully diluted) share and 12.6% of its risked NAV of $2.78/fd share.

Quick facts: Prairie Provident Resources

Price: 0.02 CAD

Market: TSX
Market Cap: $3.44 m

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Prairie Provident Resources named herein, including the promotion by the Company of Prairie Provident Resources in any Content on the Site, the...


2 min read