Cowen Downgrades Two-Thirds Of E&P Coverage Portfolio

In a report published Monday, Cowen And Company analyst Ryan Oatman suggested that companies within the Oil & Gas Exploration & Production sector could see approximately 50 percent downside to 2017 consensus estimates. According to Oatman, he sees a "stronger" outlook for US production, the likelihood of the Iran deal surviving and a belief that oil price strip at current levels is "appropriate" through 2017. "Lower anticipated oil prices cause us to reduce capital spending estimates for many names under coverage, which in turn cuts production and cash flow estimates," Oatman wrote. "Our 2016 production and operating cash flow estimates are 4 percent and 35 percent, respectively, below the consensus view. Looking out to 2017, we see 10 percent downside to the consensus production estimate and 51 percent downside to the consensus cash flow estimate."

Coverage Thesis Overview

Abraxas Petroleum Corp. AXXAS was maintained at Market Perform with an unchanged $2 price target.
Bill Barret Corporation BBG was downgraded to Underperform from Market Perform with a price target lowered to $1 from a previous $5.
Bonanza Creek Energy Inc BCEI was downgraded to Underperform from Market Perform with a price target lowered to $4 from a previous $10.
Callon Petroleum Company CPE was downgraded to Market Perform from Outperform with a price target lowered to $9 from a previous $13.
Clayton Williams Energy, Inc. CWEI was downgraded to Underperform from Market Perform with a price target lowered to $35 from a previous $40.
Denbury Resources Inc. CPE was downgraded to Underperform from Outperform with a price target lowered to $3 from a previous $6.
Energen Corporation EGN was maintained at Market Perform with a price target lowered to $54 from a previous $60.
Diamondback Energy Inc FANG was downgraded to Market Perform from Outperform with a price target lowered to $75 from a previous $93.
Northern Oil & Gas, Inc. NOG was downgraded to Underperform from Market Perform with a price target lowered to $4 from a previous $5.
Oasis Petroleum Inc. OAS was maintained at Outperform with a price target lowered to $14 from a previous $18.
PDC Energy Inc PDCE was downgraded to Market Perform from Outperform with a price target lowered to $55 from a previous $72.
Parsley Energy Inc PE was downgraded to Market Perform from Outperform with a price target lowered to $19 from a previous $23.
QEP Resources Inc QEP was maintained at Outperform with a price target lowered to $19 from a previous $23.
Synergy Resources Corp SYRG was downgraded to Market Perform from Outperform with a price target lowered to $9 from a previous $14.
Whiting Petroleum Corp WLL was maintained at Outperform with a price target lowered to $26 from a previous $33.

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