Friday, November 19, 2010

Cabot Oil & Gas (NYSE:COG) Held Back by Permit Issues

Cabot Oil & Gas (NYSE:COG) has a large number of wells ready to be drilled in 2011, with 54 on the horizon, and another 8 in the pipeline. Thirty more are closed to being completed.

They're struggling because of difficulty in relationship to permits, but once that's resolved, should have a big increase in production.

Jefferies rates them as a "Buy" now, while raising their price target on them.

Concerning shale, the firm stated, "Marcellus production could easily top 300 mmcf/d by the end of next year (from -200 mmcf/d currently). Thus, we are modeling a 27% overall production in 2011 versus management indication of a minimum of 20% increase."

Cabot was trading at $35.70, gaining $1.28, or 3.72 percent at 1:14 PM EST. Jefferies has a price target of $42 on them, increasing it from $35. Earnings for full year 2011 was also raised from $0.10 to $0.60.

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