Global Hunter Securities Downgrades Venoco (VQ) to Neutral; Opportunity Cost
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Price: $12.49 --0%
Rating Summary:
3 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
3 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Global Hunter Securities downgraded Venoco (NYSE: VQ) from Accumulate to Neutral with a price target of $12.50.
Analyst, Philip McPherson, said, "VQ reported decent Q4:11 results and showed a significant increase in the value of its proved reserves. The after-tax PV-10 equated to $1.3 billion, or $11 per share net of debt. The PV-10 calculation does not include the company's 22.3% revisionary working interest in the Hastings Field, which we estimate is worth $3.50 per share. Unfortunately, all of this increase in NAV does not benefit current shareholders since the CEO of VQ is in the process of taking the company private for $12.50 per share. As such, the shares have underperformed oil-weighted E&P companies and have basically been trading in a tight range around $11 per share. We continue to believe the CEO will be successful in financing the take-private offer, but the timing of the actual transaction closing could be 60-180 days away. While investors currently have an approximate 15% upside to the take-private offer, we view the opportunity cost of committing new capital versus other opportunities with more potential upside in our universe as unjustified."
For an analyst ratings summary and ratings history on Venoco click here. For more ratings news on Venoco click here.
Shares of Venoco closed at $10.85 yesterday.
Analyst, Philip McPherson, said, "VQ reported decent Q4:11 results and showed a significant increase in the value of its proved reserves. The after-tax PV-10 equated to $1.3 billion, or $11 per share net of debt. The PV-10 calculation does not include the company's 22.3% revisionary working interest in the Hastings Field, which we estimate is worth $3.50 per share. Unfortunately, all of this increase in NAV does not benefit current shareholders since the CEO of VQ is in the process of taking the company private for $12.50 per share. As such, the shares have underperformed oil-weighted E&P companies and have basically been trading in a tight range around $11 per share. We continue to believe the CEO will be successful in financing the take-private offer, but the timing of the actual transaction closing could be 60-180 days away. While investors currently have an approximate 15% upside to the take-private offer, we view the opportunity cost of committing new capital versus other opportunities with more potential upside in our universe as unjustified."
For an analyst ratings summary and ratings history on Venoco click here. For more ratings news on Venoco click here.
Shares of Venoco closed at $10.85 yesterday.
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