PEMBINA WON ‘ LOTTERY’ WITH MONTNEY: JP MORGAN

Pembina Pipeline Corp. “won the lottery” with the growth of the prolific Montney formation and is poised to grow its dividend for multiple years, JP Morgan analysts said Thursday.

JP Morgan analyst Jeremy Tonet initiated coverage of Calgary- based Pembina Thursday with an “overweight” rating and a $47 per share price target, which is a 16 per cent premium over the company’s mid- day trading price Thursday of $40.40.

Pembina shares have risen almost 50 per cent since January.

“We view Pembina as a core Canadian energy holding considering the economically irreplaceable assets, significant vertical integration and scale, leading financial flexibility and visibility,” Tonet said in a research note.

He said Pembina “won the lottery” when producers renewed their interest in drilling in northwestern Alberta and northeastern B.C. and the company’s 60-year-old pipeline assets now offer investors “significant upside potential with continued drilling activity in the area.”

Domestic oil and gas companies have spent billions in recent years drilling for natural gas in the Montney and emerging Duvernay formations, which directly overlap Pembina’s pipeline systems in northwestern Alberta and northeastern B.C.