STXNEWS LATAM-Credit Suisse resumes coverage of Brazil's OGX at 'neutral'

Thu Jan 17, 2013 7:49am EST

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Analysts at Credit Suisse Group led by Emerson Leite reinstated coverage of Brazilian oil and gas producer OGX PetrĂ³leo e Gas SA with a "neutral" recommendation and a 12-month price target of 5.7 reais. Leite and his team wrote on Thursday that, after two years of "exploration euphoria" following the company's successful initial public offering in June 2008, "OGX entered a 'development reality' phase since 2011: a report that disappointed the market, production guidance reduction and management changes all contributed to the share price being close to all-time lows."

The prior rating was "outperform." In the opinion of Leite, there are potential "catalysts" for movements in OGX's share price, including the end of exploratory period for a series of wells, a reserves report expected for mid-2013, better production data - which makes him think that it is "risky to be overweight ahead of the events."

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