Ophir Energy shares jump 5% on Barclays upgrade to top sector pick

Shares in oil & gas explorer Ophir Energy jumped 5% on Friday after Barclays upgraded the stock to 'overweight' from 'equalweight', added it to its global top picks list and raised the price target to 225p from 200p.

The upgrade follows a review by the bank of Ophir’s Equatorial Guinea Block R floating liquefied natural gas(FLNG) project.

Barclays also noted that the stock is down around 25% in the last month, versus the peer group down 5% and said this weakness, combined with significant progress in Equatorial Guinea provides an attractive opportunity to revisit the Ophir investment case.

Barclays said the appointment of Golar LNG as midstream partner for the FLNG project provides Ophir with a lower-cost solution than its previous partnership with Excelerate Energy, and the potential to accelerate to coincide with an attractive cost environment for newly-sanctioned activity.

In addition, the bank said that Ophir is well-positioned to take advantage of declining industry costs and continues to have a strong balance sheet. Barclays expects the company to have net cash of around $600m in the first half of 2015.