Analysts indicate QGEP as best buy option

Last week, the shares of Queiroz Galvão Exploração e Produção (QGEP3) were rated Top Pick (best buy recommendation) for Brazilian Exploration & Production companies by Itaú BBA and Banco UBS. BTG Pactual and Banco Santander confirmed these indications, declaring the QGEP’s shares were good investment options in comparison to the Company’s peers.

The institutions highlighted confirmation of the discovery in the Carcará prospect (Block BM-S-8), in the pre-salt area of the Santos Basin, whose drilling revealed a substantial 470 meter column of oil, as well as expected output from the Atlanta Field, which is already in the development phase and is expected to produce its first oil in 2014. According to the analysts, these points were fundamental in the shares regaining the confidence of the market.

The Itaú report stated that QGEP’s selection as Top Pick was in line with the period focus of the analysis, which attributed more value to actual discoveries and much less to potential resources. The bank altered its 12-month target price to R$19.40, an upside of around 70% in relation to the current price. The other banks - UBS, Santander and BTG Pactual - also mentioned the Company’s excellent prospects for the third quarter, which should see the conclusion of the Carcará drilling and the release of more information on the Atlanta and Oliva development plans.

The institutions also stressed QGEP’s stronger cash position than its peers, thanks to its financial discipline dedicated to strengthening its portfolio with farm-ins and future ANP auctions.

Updated in  2014-01-08T21:17:10
All the dates of this page are presented in official timezone of Brasilia - Brazil.


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