Endeavour International to explore sale; shares fall on well damage

Thu Feb 14, 2013 10:58am EST

Feb 14 (Reuters) - Oil and gas producer Endeavour International Corp said it would explore a sale of the company as it was disappointed by the "dislocation" between its share price and the underlying value of its assets.

The company's U.S.-listed shares fell 34 percent to $3.24 on Thursday - their lowest in more than four years - after the company suspended drilling in a North Sea well damaged by a severe storm.

Shares of the company, which had a market capitalization of about $230 million, have lost about half their value in the past 12 months as of Wednesday close, following seven quarters of losses.

SunTrust Robinson Humphrey analyst Neal Dingmann cut his rating on the stock to "neutral" from "buy", citing the company's tight cash position, the lack of a credit facility and delayed potential cash flow from the Rochelle project that includes the damaged well.

The work to repair the cementing around the well pipe has been completed, Endeavour said.

The company began drilling the first of two planned wells in the Rochelle area in the third quarter of last year. Endeavour estimated it would take about 120 days to drill the other well.

Endeavour could also look at a sale of assets as part of the review. Tudor Pickering Holt & Co and Lambert Energy Advisory Ltd would be the financial advisers, Endeavour said.

Endeavour's net loss for the nine months ended Sept. 30 widened 39 percent to $119.8 million. It had gas, gas liquids and crude oil sales of $121.4 million during the period.

The Houston-based company, set up in 2004, has three producing fields and three development projects in the UK, along with some shale fields in the United States, according to its website.

Endeavour said in October it won seven licenses covering 10 exploration blocks in the North Sea.

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