Really due imo to some broker reports suggesting HDR is now fully valued (Another advisory today from Huntleys, downgrading their recommendation on HDR to 'Reduce' - valuation of $1.26). Their valuations obviously provide a conservative view of the upcoming drilling program (and many of us value this at much more than they do. Are our valuations irrational/over- exuberant? I don't necessarily think so, but it is more that the advisories are more comfortable providing recommedations for already producing/close-to- producing assets and their constituencies tend to be more conservative.).
Case in point is that Huntleys have also retained their buy on Roc oil (NPV of $2.20) - reflecting, I imagine, reasonably solid and sizable valuations for Saltfleetby (producing), Chinguetti and Cliff Head (both under development or close to). This is versus HDR with only Chinguetti.
ABM Amro's recent valuations show a similar pattern (Roc target of $2.00 and HDR target price of $2.00)
Holding both HDR and ROC
Cheers
OG
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