| Analyst Coverage And Related Media Comment

17th Jun '09 by Cuthbert C

35 comments 7465 reads

I'm creating this thread to report/record/discuss/analyse analyst comments, broker notes, recommendations and valuation.

Seems sensible to keep such material in one place, which will make it easy to find and enable an appreciation of its evolution over time.

edit :- I'm adding coverage of editorial comment - seems a logical home for it.....

*date*	*analyst/commentator*	*valuation*	*target price*	*recommendation*
20/5/09	Cazenove	1742p		buy
30/6/09	Citibank		1580p	buy
7/7/09	Daily Telegraph/Questor			buy
7/7/09	Nomura		1555p	reduce
9/9/09	Numis			add
11/9/09	IC			sell
13/10/09	Merrill Lynch		1706p	buy
4/2/10	RBS		1400p	buy (target reduced from 1495p)
10/2/10	BoA/Merrill Lynch		1797p	buy
10/2/10	Citi		1655p	buy
10/2/10	Evolution		1050p	neutral
11/2/10	Oriel			add
11/2/10	RBS		1400p	buy
25/2/10	Goldman Sachs		1652p	conviction buy
1/3/10	macquarie		1500p	outperform
3/3/10	Morgan Stanley		1400p	overweight

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emptyend

11th Sep '09

In reply to doverbeach (post #15)

....mmmmm....as I pointed out to Edmond on ADVFN re this article's sell rec:

That'll be because the oil bloke at the Chronic thinks that exploration should come "for free"......
.......so if you approach any stock with massive explo upside (such as Dana) with that sort of blind prejudice then you are ALWAYS going to recommend selling when drilling prospects are close [and of course the odds of being "right" are in your favour, even if the scale of the gain from being "right" is vastly smaller than the potential opportunity cost from being "wrong"

Trolla spud now overdue...... ;-)
If, of course, Trolla or the other wells actually succeed then the IC will be recommending buying - because it will then be a development project that adds to future earnings.
Verily it is a funny game, this selling low and buying high they go in for over there ;-)

Of course the odds favour the journalist, because most explo wells fail. However, if Trolla should come in then there is a serious prospect of an immediate rise of 25-30% in the shares.......so a smallish overvaluation potentially versus a large upside (ie the usual pre-drill scenario). It is worth remembering, I suspect, that the Trolla well is intended (by Discover Petroleum*) to "prove" their new CSEMI technology.......so I rather suspect that the chance of success may be a bit better than the usual CoS which relies only on seismic.

I'd hate to be a journo having to invent "tips" every week......

ps....* http://www.discoverpetroleum.com/int/sections/technology

Edit: Trolla spudded on 6th Sept : http://www.stockopedia.com/forum/view/27979/dana-investment-programme?comment=42#42

doverbeach

13th Oct '09

Recent (today?) Meril note out, quoted on Alphaville http://ftalphaville.ft.com/blog/2009/10/13/77406/markets-live/ 11.49am : (my bold)

Raising NAV by 266p to 1,706p following asset review - Buy
We take the opportunity to review Dana’s oil & gas portfolio. Whilst, YTD, Dana’s
exploration effort has had mixed results, we believe that the depth of its N.Sea &
Egyptian portfolio, along with the company’s good risk management, continue to
present investors with an attractive risk/reward proposition. In addition, its UK
producing (or near-producing) gas assets could prove extremely attractive to Euro
utilities looking to expand upstream. Reflecting a more constructive view on the
exploration portfolio (+125p), further de-risking the Babbage gas field (+95p) and
a further uptick in volumes (GKA and Ettrick fields, +77p), partially offset by the
recent Trolla dry well (-31p), we raise our NAV by 266p to 1,706p. We reiterate
our Buy on Dana; our new of PO 1,706p (from 1,440p) reflects our NAV changes.

Cuthbert C

10th Feb '10

Bank of America/Merrill Lynch issued a report today

....upping our NAV by 10p to 1,797p. The stock trades at a

c45% discount, making it one of the cheapest European E&Ps we follow....

Recommmendation = BUY

Price Target = 1,797p

Citi has today issued an update saying BUY with a target = 1655p

Evo has issued an update maintaining their NEUTRAL stance with a price target = 1050p

11th Feb '10

Grauniad comment, quoting Oriel - who put the investment case in a nutshell:

We retain our add recommendation and note that Dana's shares are standing at a discount to our risked net asset value whilst Dana has an active near term drilling programme.

....to which I would add the point that M&A potential isn't to be ignored. Dana may not be "flavour of the month" with the City - but that doesn't mean that the industry would take the same view, especially when the assets are patently available very cheaply.

4/2 RBS reduced target price from 1495p to 1400p but maintain BUY rating

25th Feb '10

...Goldman Sachs ...expressed a preference for FTSE 250-listed E&P Dana Petroleum, which rose by 31p to 1116p. "We believe that at these levels, M&A [mergers and acquisition] speculation should provide a floor to valuation, while the 2010 exploration option is 'free'," Goldman said, moving Dana to "conviction buy" from "neutral", with a revised 1652p target price, compared to 1631p previously...

source:- market report

madmix

3rd Mar '10

Morgan Stanley adjusts price targets on UK oil and gas stocks... says the E&P companies have largely performed in line with the wider European energy group year-to-date. Morgan Stanley adds that after a relatively quiet February, drilling catalysts should return for the group from March onwards. The brokerage... Cuts Dana Petroleum (DNX.LN) target to 1400p from 1450p; overweight.

Just updated the header to incorporate recent(ish) posts on this thread.

Have I missed anything?

The glaringly obvious conclusion from the table in the header is that markets can remain irrational for considerable periods of time.

Here we have loads of analysts almost all of whom think this stocks is very significantly undervalued - and yet the undervaluation persists and persists.

wake me up when things start to move......

9th Mar '10

Macquarie -1st March 2010 : Target Price 1500p (up from 1400p) upgraded to Outperform from Neutral.

Comments made when price was 1085p.

Reasons for upgrading to Outperform: The recent pullback in the share price and near to medium-term drilling of the Bamboo and Anne-Marie prospects within DNX’s active portfolio of up to 17 exploration wells in 2010.

Solid fundamentals and value: Solid balance sheet, with largely undrawn US$400m facility. DNX is trading at a 27% discount to our core NAV, and looks attractive on reserve and cashflow multiples.

Risks: Exploration failures, production disruptions.

Catalysts: Bamboo exploration well (DNX, 50% interest, 2Q10 results, 19p risked/ 96p unrisked) and Anne-Marie exploration well (DNX, 25% interest, 2Q/3Q10 results, 37p risked/117p unrisked).

djpreston

15th Apr '10

Following Platypus success JPM have issued a note saying they woudl expect the SP to respond positively - they value the well at 38p unrisked.

Reiterates Core NAV as 1558p Derisking Platypus theyir risked NAv moves to 2015p from 1990p previously.

Still rated as Neutral.

BoA Merrill have a small comment - believe commerciality for Platypus is almost assured. Expect a 10-15p increase to consensus NAVs to reflect the news. Still rated Buy.

A few more comments coming in:

Numis - Hold 1% added to risked NAV. Says it trades at 1.3x core value and 0.9x risked NAV - prefers PMO due to superior near term production growth, valn disc (0.99x and 0.89x) and rising HSFO linked gas prices in Sing (>$13.5/mcf).

Deutsche - Hold 8p added to risked NAV (now 1747p)

Citi - Buy/High Risk 10p to Target (now 1525p). Adds 1% (14p) to Risked NAV (now 1527p).

Re the analysts, I don't think that any of them yet have a proper understanding of the Anne Marie prospect that is due to spud next month! It is actually a rather more complex prospect than has been presented to the market - and certainly it is more complex (with more potential upside!) than analysts seem to have assumed.

My understanding is that there are four potential reservoirs at Anne Marie, each with volumes in ranging from 60-90MMbbl in the P50 case, and c100-125MMbbl in the P10, and with each reservoir having about a 20% CoS.......so, taking the potential top-end P10 figures, there could be up to 400-500mn bbls recoverable across the four reservoirs. Anne Marie is, of course, almost virgin territory from an explo p.o.v.....so there is plenty of uncertainty - which is why the shorthand scoping of the potential has been indicated as about 90mn bbls P50 with a 30% CoS.......

.....the P50 average expectations are in the same ballpark for both ways of looking at the prospect - but the upside potential MAY be very much bigger than the market (using the simplistic figures) is assuming!

The above points reconcile pretty well with the earlier indications from ENI that I referred to in my comments on Anne Marie from 5 months ago: http://www.stockopedia.com/content/re-dana-investment-programme/27979?comment=76#76 in which I pointed out that the OOIP P10 might be up to about 2.6bn bbls.

So, in sum, I think the next few months may be rather more interesting than the market currently thinks (again!)!

kyu66

5th May '10

Nomura raises its target price on a host of oilcos today:

Dana price target to 1617P from 1484P

oilretire

OT I know, but any chance of posting the others mentioned?

Didn't want to clog the board but I guess here is as good as anywhere

Afren Plc to 138P from 130P
Cairn Energy PLC to 479P from 445P
Dana Petroleum PLC to 1617P from 1484P
Heritage Oil PLC to 629P from 606P
Premier Oil PLC to 1649P from 1525P
Soco International PLC to 1840P from 1765P
Tullow Oil PLC to 1495P from 1435P

marben100

1208 GMT [Dow Jones] Nomura raises Dana Petroleum (DNX.LN) price target to 1617p from 1484p as it reviews the E&P sector and raises its oil price forecasts. Notes the macro environment remains robust and drilling activity is picking up, with a particular focus on Greenland and West Africa. Nomura also raises Soco International price (SIA.LN) target to 1840p from 1765p and Heritage Oil (HOIL.LN) price target to 629p from 606p. Has reduce rating on Dana, and neutral ratings on Soco and Heritage.

So, with Dana's SP @ 1165p and a target of 1617p, how low does the SP have to be for them to rate it "buy"?

You've gotta laugh.

Mark

6th May '10

Hmmm... perhaps this (just out on the newswires) has something to do with recent SP weakness - but nevertheless, even in the light of it the reaction seems well overdone to me, considering that most of Dana's output is oil:

ESSEN, Germany (Dow Jones)--E.ON AG (EOAN.XE) expects its first operated natural gas platform will begin production later than originally planned.

The Babbage gas field in the U.K. North Sea will begin production in autumn 2010, E.ON's new Chief Executive Johannes Teyssen told shareholders at the company's annual general meeting in Essen, western Germany.

A company spokesman later said Babbage may start production as early as June, but said it would definitely start operating in autumn at the very latest.

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Cuthbert C

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