Today Scotia Capital, one of the PDP underwriters, lower their PDP target to $1.2 per share. PDP number of outstanding shares was increased from 55 millions to 156 millions.


Sep 2.2009
Petrolifera Petroleum Limited. Financing Closes (PDP-T C$0.80)

Gavin Wylie - 403-213-7333
Craig Butchko - 403-213-7762
Event
* Proceeds from Petrolifera's $50M equity financing have been earmarked for debt repayment and to fund its high-impact exploration through 2009 and into early 2010. That said, drilling in Peru could be pushed further into 2010 unless a suitable farm-out can be established.
Implications
* Factoring in the newly issued shares (54M) and proceeds, our revised 2P NAV stands at $1.47/share (vs. $2.11/share). Our estimates assume no proceeds from a potential farm-out in Peru that could recover a portion of the US$28M (100%) spent thus far.

* For the balance of 2009, Petrolifera's $23M capital budget will include minimal drilling and well conversions in Argentina, and potential spending associated with a La Pinta re-entry if the company can secure a snub-unit.

* We maintain our 2-Sector Perform rating on Petrolifera and have lowered our one-year target to $1.20 per share (vs. $1.75), which is based on our revised risked NAV of $1.20 per share (vs. $1.77/share).

Recommendation
*The added cash should help to alleviate Petrolifera's near-term constraints and refocus its attention to exploration activity in Colombia and Peru..