Citigroup Neutral on Endeavour's Plan to Purchase Conoco's Interest in UK North Sea Fields

Citigroup has published a research report on Endeavour International END after the company announced its plans to purchase ConocoPhillips' COP interest in three UK North Sea fields. In the report, Citigroup writes, "Endeavour announced that it has agreed to buy Conoco's interest in three U.K. North Sea fields (Alba, MacCulloch, Nicol) for $330m with an effective date of January 1, [2012]. However, the cash cost at closing should be less than $260mm with a nearly $60mm tax benefit to be realized at the end of next year. The assets will add ~10 MBOE/d to production and ~24 MMBOE to proved reserves, more than doubling END's 2012 projected output and YE'10 proven reserve base. Closing is slated for the first quarter of next year." Citigroup maintains its Neutral rating and $9 price target on Endeavour International, which closed yesterday at $7.94.