Enquest Plc (AIM:ENQ) shares were downgraded by Barclays to 'underweight on the back of the government's windfall tax plans.
The 'energy profits levy' is estimated to cut EnQuest's 2023-26 cash flows by US$450mln, the bank's analysts reckoned.
This reduced Barclays' discounted cashflow equity valuation of the shares by 36%.
"It also puts debt refinancing plans back in focus, just as higher oil prices and improved operating performance had eased concerns."
Enquest shares, which were up around 80% since the start of the year until chancellor Rishi Sunak confirmed the windfall tax last month, fell 7% on Monday to 27p.
Meanwhile Monday, AIM-listed Serica Energy Plc (AIM:SQZ) issued a statement to try and reassure investors that it will be able to reduce its tax bill under the levy rules.
Shares in Serica, which produced roughly 5% of the UK’s gas, have suffered over the past month, following a strong rise in the first months of the year.