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Jefferies & Company has published a research report on Oasis Petroleum
OAS and has downgraded the company from Buy to Hold based on valuation.
In the report, Jefferies writes, "[A]t the current enterprise value, the company is receiving credit for almost 4 years of activity. EV of $3.5B less $1.9B pv10 at year-end '11, equals $1.6B of premium for potential beyond '11. We estimate Bakken locations are worth a pv10 of $5.5mm each, assuming LT oil of $85. So $1.6B reflects almost 300 net locations, almost 4x the number of wells scheduled for '12. In total, we estimate the company is getting credit for 400+ net locations, including the 112 wells drilled to-date. The corporate presentation identifies 1,081 net locations on their acreage."
Jefferies has also lowered the price target from $36 to $34 on Oasis Petroleum, which is currently trading down $1.32 from yesterday's $33.95 closing price.
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