MacQuarie lit a fire under Cairn Energy PLC (LON:CNE) this morning, with the stock topping the FTSE 250 leader board after the Australian broker upgraded its rating for the explorer on hopes for its Senegal and North Sea developments.
In a note to clients, MacQuarie’s analysts raised their stance for Cairn to ‘outperform’ from ‘neutral’ after hiking their target price to 270p from 246p previously.
In early morning trading, Cairn shares were 4.6%, or 9.7p higher at 220.9p.
READ: Cairn Energy marks latest SNE well success offshore Senegal
The broker’s analysts said they “recommend buying the shares ahead of share price appreciation associated with Senegal progress and commencement of cash flow generation in the UK North Sea.”
They added: “Upper reservoir connectivity could drive 2C uplift Senegal appraisal looks positive, the most recent results looking to confirm the North-South connection proposed in Cairn’s Upper Reservoir field model.”
The analysts noted that “full data from the interference test are necessary to determine full potential here, and we should get news flow on this with the 1H results in August 2017.”
In the North Sea, they pointed out that key catalysts will be the first oil from the Kraken development project, expected in the first half of 2017, and first oil from Catcher, expected in the first half of 2018, with a resource update due on August 18 as well as ongoing drilling results.