RBC Capital Markets over the weekend increased Obsidian Energy's (OBE.TO) price target to C$18 from $14 with a sector perform rating.
Obsidian's adjusted funds from operations of $61 million in the first quarter reflected broadly in-line production of 28,733 barrels of oil equivalent per day, RBC said.
Obsidian executed an active first-quarter development drilling program at both the Peace River and Willesden Green operations in Alberta, alongside continued progress on its waterflood initiatives in the Dawson/Nampa areas, RBC said.
"We believe that Obsidian should trade at an average/modest discount relative valuation given potential upside within its Peace River portfolio, partly offset by its limited scale," RBC said.
Obsidian traded at $17.47 per share at last look Monday on the Toronto Stock Exchange.
Price: $17.26, Change: $+0.27, Percent Change: +1.59%