Wells Fargo Cuts Valuation Range on Rosetta Resources (ROSE) as South Alberta Basin Disappoints.

Wells Fargo is maintaining its Outperform rating on shares of Rosetta Resources (NASDAQ: ROSE), but due to reduced Alberta Bakken prospectivity the firm is cutting its price valuation from $58-$62 to $52-$56.

Management released its 2012 production and expense outlook inline with the firm's expectations although capex was $40 million higher. The company also announced plans to complete its 7 well Alberta Bakken horizontal program in the first half of 2012 are on schedule, although the results for its first two wells came in below expectations.

An analyst at Wells Fargo comments, "Rosetta Resources has assembled an attractive inventory of development and exploration in a number of U.S. basins. The Eagle Ford offers near-term cash flow and production growth, while exploration in the Alberta Basin brings a potential game-changer. A highly regarded management team rounds out this compelling story, in our view. Our Outperform rating reflects our view on potential upside."

The firm is reaffirming its Q4 and FY11 EPS estimates of $0.66 and $2.07, but is raising its FY12 estimate by $0.05 to $3.35.

For an analyst ratings summary and ratings history on Rosetta Resources click here. For more ratings news on Rosetta Resources click here.

Shares of Rosetta Resources closed at $50.55 yesterday.

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