Dejour (DEJ) announced the successful drilling of a third well on its Woodrush property in northeastern British Columbia. The new well should be producing oil at a rate of 300 to 400 barrels of oil per day by the end of October.
As a result, total field production should increase to between 1100 and 1200 barrels of oil equivalent (BOE) per day. We are raising our fourth quarter estimate from $0.01 to $0.02, and our full year estimate to breakeven from a loss of $0.01.
We reiterate our Outperform rating based upon the expectations of a successful fourth well being completed later in the fall drilling season, along with an attractive valuation level of the stock.
The company’s production profile is dramatically improving with the new wells, and more importantly, the positioning of the wells will make a water flood project feasible, allowing production to increase further. Our price target remains $1.05.
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