While Compton Petroleum Corporation's (Compton) 1Q 09 net revenues were in-line with our estimate, operating loss was below our expectations due to lower-than-anticipated operating and depreciation expenses. While we are likely to revise our estimates upwards in light of the 1Q 09 results, we believe the recent significant appreciation in stock price has rendered the common stock over-valued at current…

As Compton is primarily a natural gas player, our forecast for its top-line in 2009 has been impacted by the current low gas prices and our forecast that the average gas price will decline y-o-y during FY 2009. Furthermore, given the company’s limited financial flexibility, Compton is not in a position to allocate capital to increase production from its natural gas reserves during the year....

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Compton Petroleum Corporation’s (Compton) common stock has declined significantly since we had moderated the common stock rating from a SELL to a HOLD in our company news alert dated 06 February 2009, which we believe reflects a decline in oil prices and general turmoil in equity markets over the same period. Although our target price no longer supports our HOLD rating, we maintain our HOLD rating given our concerns regarding the…