InPlay set initial 2022 capital budget and operational guidance above our aggressive targets. Management plans to spend C$58 million (vs our C$52) to drill 17 wells (16). With wells paying for themselves in months, expanding drilling is an easy decision. Notably, six of the wells will be drilled in the first quarter which will add to production early in the year. Management forecasts 2022 production of 8,900-9,200 BOE/day in line with our estimate of 9,200 BOE/day. InPlay has a track record of upping guidance if drilling is successful and we would not be surprised to see management do so again in 2022.Increased drilling means improved financial results. Management projects AFF (Adjusted Fund Flow) of C$111-$117 million in 2022 above our model's C$110 million. The higher amount largely reflects a higher oil price assumption ($72.50/bbl vs $70/bbl) but also speaks well about management's expectations regarding well operating costs. Management projects net debt at the end of 2022 of C$22-$28 million vs our C$18 million forecast, largely due to an additional C$6 million that capital budget spend. We will update our model to take management's guidance into consideration once final 2021 results are reported.Don't underestimate the impact of the Prairie Storm acquisition. We have made much of the drilling success InPlay had in 2021 in the Cardium field, raising our price target several times during the year. We are equally excited about the Prairie Storm acquisition in November which expands InPlay's land ownership in the play. Should InPlay be able to duplicate its drilling success across a wider range of assets, it will be fast on the way to grow from a junior explorer to a mid-tier explorer. Such a transition could garner additional investor attention and help the stock price to continue its upward trend.Speaking of the rise in stock price, when is too high too high? The shares of IPOOF have risen 600% in 12 months but remain below our 12-month PT of $3.00 per share. We raised our PT three times in 2021 in response to favorable drilling results and higher energy prices. Further increases may become more difficult but are not beyond the realm of possibility. Meanwhile, we recommend investors enjoy the ride and continue to purchase shares at prices below our price target. Read More >>