ISI Group Reiterates Perform, $13 PT on Venoco

ISI Group maintains its Benchmark Perform rating and $13 target price on Venoco VQ as it sees Monterey upside case fading amid challenges. ISI says, “VQ's Monterey shale challenges continue nearly two years into testing the play. The 2012 capex budget of $255MM was above our $215MM estimate and management's prior view for a yr/yr decline. … We reduce our 2012/13 CFPS forecast by 5%/11% on higher costs and recent narrowing in WTI/California oil spreads (to $10/Bbl from $28). Meanwhile, the CEO's $12.50/share buyout proposal cannot move forward until the Board has completed its own strategic alternatives process.” VQ closed at $8.03 per share on Monday.