Ahead of the Bell: W&T Offshore downgraded
W&T Offshore downgraded to "Underperform" on growth strategy, liquidity, drilling outlook
On Monday August 10, 2009, 8:29 am EDT
Buzz up! 0 Print.Companies:WT Offshore Inc.
NEW YORK (AP) -- Oil and gas company W&T Offshore Inc.'s growth strategy, liquidity position and weak drilling activity plans will likely pressure shares, an analyst said on Monday as he downgraded the stock.
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WTI 11.62 0.00
{"s" : "wti","k" : "c10,l10,p20,t10","o" : "","j" : ""} BMO Capital Markets analyst Dan McSpirit said the company's growth-through-acquisition strategy "does little to excite" and may highlight the company's weak portfolio of drillable prospects.
McSpirit also raised doubts about the company's liquidity position and its "few exploration drilling catalysts," as the company recently said it has completed most of its drilling projects for the year.
"Investors would do well to gain exposure to producers whose stories are already filled with internally driven growth catalysts for the shares," McSpirit said, downgrading W&T Offshore's stock to "Underperform" from "Market Perform."
Last week the company posted a second-quarter loss, driven by significantly lower oil and natural gas prices, falling sales volumes and one-time items.
The quarterly net loss amounted to $6 million, or 8 cents per share, compared with earnings of $134.6 million, or $1.76 per share during the same period last year. Excluding special items, the quarter's adjusted loss was $5.3 million, or 7 cents per share.
Revenue tumbled 67 percent to $150.4 million, down from $461 million in the prior-year period. Analysts polled by Thomson Reuters estimated a loss of 48 cents per share on revenue of $137.7 million, on average. Analysts typically exclude one-time items.
SunTrust Robinson Humphrey analyst John Gerdes kept a "Neutral" rating on the shares, but raised his price target to $13 from $10, citing the company's 16 percent production gain over the first quarter and lower operating expenses.
Shares of the company closed at $11.62 on Friday.
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