Ticker

INPLAY OIL CP (IPOOF) came out with quarterly earnings of $0.07 per share, beating the Zacks Consensus Estimate of $0.03 per share. This compares to earnings of $0.18 per share a year ago.

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InPlay Oil is upgraded to STRONG BUY, driven by robust free cash flow and a secure 7% dividend, even at $55 WTI. IPOOF's scale and productivity gains support a 15% free cash flow yield at $60 WTI, rising to 20% at $65 WTI. Debt reduction using discretionary free cash flow offers clear capital appreciation, with every $40M deleveraging translating to a 10% share price uplift.

Following a careful analysis of the Zacks Oil and Gas - Exploration and Production - Canadian industry, we advise focusing on shares of CNQ, IPOOF and GTE.

InPlay Oil Corp. has completed its acquisition. Production is expected to approach 20,000 BOED. Exposure to natural gas and improved well design are offsetting weak liquids pricing.