Borders and Southern (LON:BOR) is no longer worthy of a ‘buy’ recommendation, according to Numis Securities, which today reset its crude mark-to-market for London’s oil equities.
Brent crude forecasts were cut back by the broker to account for the anticipated rise in Iranian oil exports and higher than expected production from OPEC generally.
Numis reduces the 2016 forecast to US$70 from US$80 per barrel, though the broker says it remains ‘on the fence’ about the longer term.
Analyst Sanjeev Bahl believes that cheaper fuel prices mean the economics of Borders’ condensate project in the Falklands will be marginal, and as a result he expects it will be difficult for the company to secure amicable farm-out terms with a development partner.
Premier Oil (LON:PMO), which has made new discoveries in the Falklands this year, was upgraded slightly to ‘buy’ from ‘add’ though the analyst’s positivity is more to do with strong production in Vietnam and the group’s cost savings.
Numis also lowered recommendations for EnQuest (LON:ENQ), to ‘add’ from ‘buy’, and Faroe Petroleum (LON:FPM) to ‘hold’ from ‘buy’.
Elsewhere, Credit Suisse upgraded Tullow Oil (LON:TLW) to ‘outperform’ and set a new price target of 440p, which is about 50% above the current price of 265p.
Ophir Energy (LON:OPHR), meanwhile, was downgraded by the Swiss bank to ‘underperform’.
Pest control group Rentokil (LON:RTO) was another Credit Suisse downgrade as it was cut to ‘neutral’ from ‘outperform’.
Goldman Sachs increased its price targets for Associated British Food (LON:ABF) and Tate & Lyle (LON:TATE), which rise to 3,445p from 3,150p and 470p from 460p respectively.