Bonanza Creek, an independent US oil and natural gas producer focused on the Niobrara Oil Shale in Colorado and the oily Cotton Valley sands in Arkansas, has announced an increase to its 2013 capital budget of $60-75 mln to $460-475 mln. According to management, due to improved field-level development efficiencies the company’s operating activities go ahead of plan, so it decided to transfer part of 1Q14 investment program into 4Q13. Incremental capex is expected to contribute to 2014 production momentum. Bonanza Creek is a growth story, so the news that infers future growth acceleration will be positively valued by the investors, in our view. Operating and production profile of Bonanza Creek looks strong. 2Q13 production volumes of 13 492 boe per day mean a 55% increase over 2Q12 and a 10% increase over 1Q13. The management’s guidance for the full year production growth rate is 62%. Revenue in 2Q13 soared 64% y-o-y, adjusted EBITDA grew 46% y-o-y. In the coming years the fast growth of the company’s financials is expected to continue. In 2012-2015 revenue is forecast to grow at a CAGR of 47%, EBITDA and net income − at a CAGR of 55%. A significant advantage of Bonanza Creek over its peers is strong balance sheet with 2013E net debt to EBITDA ratio of less than 2x. This gives the company more operating flexibility and also reduces risks of dilution for the equity owners. We believe that shares of Bonanza Creek at current price represent an attractive investment opportunity. Medium-term target price for the company’s stock is $48.