UPDATE: C.K. Cooper & Company Reiterates Buy Rating, Lowers PT on Saratoga Resources
In a report published Wednesday, C.K. Cooper & Company reiterated its Buy rating on Saratoga Resources (NYSE: SARA), but lowered its price target from $9.00 to $7.00.
C.K. Cooper noted, “The results for the quarter were disappointing, not only because of lower production, but also because the company reported cost overruns on its Mesa Verde and Tomahawk wells and a working capital deficit of $6.5MM at the end of the 3Q12. As a result of tight liquidity and a lack of a credit facility, management will now defer the drilling of its ‘Rocket QQ210' well and several large workovers until 2013, allowing cash to accumulate to fund these operations. While the company should rebound from the shock of the Hurricane, the impact from Isaac and the limited access to credit underscore a higher level of operational risk for SARA. As a result, we are lowering our price target from $9.00 to $7.00, which is below our proved NAV value of $9.39/SHARE.”
Saratoga Resources closed on Tuesday at $4.35.
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