Credit Suisse Cuts Price Target on Venoco (VQ), Lowers Monterey Production Guidance by 75%

Credit Suisse is maintaining its Neutral rating on shares of Venoco (NYSE: VQ), but is lowering its price target from $20 to $17 as the company cut its oil contribution from the Monterey Shales Oil Assets to 500 Boe/d, which is a quarter of its previous forecast.

The firm notes that it remains optimistic with VQ's potential with Monterey, but is tweaking its EPS estimates as it now believes the time frame for the upside has been pushed out to 2012. Credit Suisse is changing its FY11 estimate by +1% to $0.87, FY12 by -16% to $0.78, and its FY13 by +1% to $1.75.

Credit Suisse comments, "VQ plans to focus on testing the Sevier and Salinas for the remainder of the year while taking time to assess recent 3D seismic before ramping again. VQ plans to drop the number of rigs to one from two for the Monterey vs. ramping to four by the end of 2Q11. This slowdown appears related to problems with sourcing/securing service crews along with operational issues surrounding the wells."

For more ratings news on Venoco click here and for the rating history of Venoco click here.

Shares of Venoco closed at $14.40 yesterday.

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