Canaccord axes target price on iGas

Analysts at Canaccord Genuity cut their target price on exploration and production company IGas Energy in half on Thursday in order to incorporate Westminster's changed stance on fracking.

Canaccord said the change in the government's position on onshore fracking in the UK, specifically impacting the evaluation of the UK shale gas play, led to its reassessment of the carrying value for the company's shale gas assets and, as a result, saw it reduce its NPV10 risked based target price from 150.0p to 75.0p.

"For some time, while the UK shale gas operational programme was active, we have carried a substantial value for that part of IGas' assets in our target price," said Canaccord.

"Following the moratorium on fracking activity, that is no longer appropriate."

However, the Canadian broker said IGas continued to trade at "a substantial discount to core producing asset value", so it maintained its 'buy' rating on the stock.

"With the stock trading at 35p, only 50% of our conventional asset value, it remains in our view an attractive, stable, production-backed, value-play."