Canaccord Genuity downgraded Bill Barrett Corporation (NYSE: BBG) from Buy to Hold and lowered the price target from $ 36.00 to $ 19.00.
Canaccord Genuity said, “Based on actual capital spending/production performance, the capital intensity of the Uinta play is comparable to other major oil plays. Yet, Uinta crude sells at a $ 15-$ 20 NYMEX discount given its high-paraffin content and limited regional market, while Bakken/Niobrara/Permian oil sells at a $ 5-$ 10 deduct to NYMEX. Accordingly, while the other major oil plays generate a 10% unleveraged return at ~$ 100 NYMEX, the Uinta play requires a $ 115-$ 120 NYMEX oil price to generate the same return.”
Bill Barrett Corporation closed at $ 18.66 on Friday.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Tags: Canaccord Genuity
Posted in: Analyst Color, Downgrades, Pre-Market Outlook, Analyst Ratings