* 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
June 25 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
"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
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