commsec research wrap, page-13

Overweight with a $2.93 price target?

JP Morgan 23-Jan-14 Overweight

The interesting news for JP Morgan from the December quarter report was the acquisition of the Eaglebine play. This sits just outside the company's core area and the broker reserves judgement until more is learned about the acreage.

Aurora's attraction rests on being a pure play in the Eagle Ford and the broker is concerned this may be diluted by forays into less proven areas. The Overweight rating is retained and the price target is reduced to $2.93 from $3.00.

UBS 23-Jan-14 Buy

The December quarter was solid in the broker's view and the strength is expected to continue, underpinned by the Eagle Ford shale. UBS expects a 46% increase in 2014 on 2013 production levels.

Aurora has secured 14,000 net acres in the Eaglebine play but does not anticipate material expenditure there in 2014. Accordingly, UBS, while positive about the acquisition program, believes it's too early to judge the potential impact on valuation.

The Buy rating and $3.70 price target are maintained.