UPDATE 1-Jefferies cuts Tower Resources; names Tullow, Ophir top picks
* Cuts Tower Resources to "hold" from "buy"
* Cuts Cove Energy to "underperform" from "hold"
* Includes Tullow, Ophir, Bowleven among top picks
* Also names Falkland Oil & Gas, Chariot Oil & Gas among top picks
June 25 (Reuters) - Jefferies downgraded Tower Resources Plc on a lack of near-term catalysts, particularly after drilling in a block adjacent to the company's acreage in Namibia proved unsuccessful, and named Tullow Oil Plc and Ophir Energy Plc among its top picks.
Jefferies cited Tullow's diversified exploration programme across Africa and South America and Ophir's successful Tanzania exploration programme for the inclusion.
"We continue to favour explorers and producers with high quality exploration with near-term exploration catalysts," analysts led by Laura Loppacher said in a note to clients.
The brokerage also included Falkland Oil & Gas Ltd, Chariot Oil and Bowleven Plc in the list.
Jefferies said unsuccessful drilling near Tower's block by Chariot Oil & Gas Ltd and the farm-out deal with Repsol SA raise the possibility that drilling near the block may be a year or more away.
"Tower will struggle to get momentum behind it in the current market," the brokerage said, cutting its rating on the company's stock to "hold" from "buy".
Jefferies also cut Cove Energy Plc, caught in a bidding war between Shell and Thailand's PTT Exploration and Production, to "underperform" from "hold," as it expects shares to slide if Shell does not make a counter bid.
"While we cannot eliminate the possibility of a Shell counterbid, we believe Shell's strategic goal is to acquire additional interests in the area and continuing to bid up Cove could increase the cost of its later, more material acquisitions," the brokerage said.
PTT on Monday extended the deadline to accept its $1.9 billion offer.
Shares in Cove have largely traded above PTT's 240 pence per share offer since the Thai company's bid in May, indicating that investors are holding out for a higher bid.
For related ratings and price target changes, click on
(Reporting by Abhishek Takle in Bangalore; Editing by Sriraj Kalluvila)
- Tweet this
- Share this
- Digg this
- Ukraine, Russia, EU likely to agree gas supply deal Thursday - officials
- St James's Place outperforms as FTSE stages late rally
- U.S. nurse defies Maine's Ebola quarantine, takes bike ride |
- Shell outpaces peers with profit growth, keeps spending
- Barclays sets aside 500 million pounds for FX fines as profits rise |