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TICKERS: BNE

Alberta-Based Oil & Gas Firm Makes 'Right Choice' in Lowering Dividend
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A CIBC report notes the move increases this company's financial flexibility.

In a Nov. 29 research note, analyst Jamie Kubik reported that Bonterra Energy Corp. (BNE:TSX) will reduce its dividend by about 90% to CA$0.12 per share from CA$1.20 annually, beginning with the November dividend (payable in December).

CIBC considers this change "prudent," Kubik noted. "While the stock may not be immediately rewarded for this move, we see it as ultimately being the right choice considering the pressure on realized pricing and producer cash flows in the current environment," he added.

He pointed out that this dividend lowering will afford Bonterra improved financial flexibility to weather today's environment and the chance to pay down debt as price levels increase, likely in H2/19.

To reflect the new dividend figure, CIBC revised its models on Bonterra. Specifically, Kubik explained, "given the differentials on light oil remain wide in H1/19, we have back end weighted our capital spending expectations for 2019 and moderated our capital efficiency assumptions, given we anticipate management will look to high-grade its capital program."

Consequent to the above, the bank reduced its price target on Neutral-rated Bonterra to CA$11 per share from CA$13. The energy company is trading today at around CA$7.11 per share.

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Disclosures from CIBC, Bonterra Energy Corp., November 29, 2018

Analyst Certification:
Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst's personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Analysts employed outside the U.S. are not registered as research analysts with FINRA. These analysts may not be associated persons of CIBC World Markets Corp. and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Potential Conflicts of Interest:
Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.

In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.

Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.

Important Disclosure Footnotes for SSR Mining Inc. (SSRM)

· CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from Bonterra Energy Corp. in the next 3 months.





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