Morgan Stanley points to undervalued North Sea oil and gas plays
http://www.proactiveinvestors.co.uk/companies/news/29626/morgan-stanley-points-to-undervalued-north-sea-oil-and-gas-plays-29626.html
North Sea-focused oil and gas plays have had a generally rough time recently on some downbeat exploration results and fears government is planning a hike in tax for UK oil and gas production. Broker Morgan Stanley, however, believes the markdowns on these companies and fears over a tax increase have been overdone.
In a wide ranging overview of the North Sea oil and gas sector the broker notes that the concerns have led to companies focused on region to underperform the Brent index by 40% and the FTSE 250 by 15% so far in 2011.
This underperformance, it argues, has led to the rise of some ‘attractive valuations’ whose worth will become increasingly clear as the mismatch of company valuations versus the oil price is recognised and as drilling activity in the North Sea picks up again in the second half.
But its not just company fundamentals Morgan Stanley analysts Jamie Maddock and Martijn Rats are upbeat about. The North Sea might be considered a mature province by many, but the analysts reckon several under explored regions across the territory, including West of Shetland, Mid Norway and Barents Sea, “could provide meaningful discoveries for majors and independents”....
