Canaccord highlights potential in Rockhopper and Eland Oil&Gas

The challenges facing Falklands-focused Roockhopper in finding a partner for its Sea Lion project should not be "underestimated", analysts Alex Brooks and Charlie Sharp said in a research note sent to clients.

Nonetheless, assigning a 10.0% 'chance-of-success', as the market currently does, is "too tough", they surmised.

Meanwhile, Eland's bedding-in of the new shipping export route means it no longer needs to rely on the Forcados terminal alone, underpinning the stock's value and reducing risk.

Both Rockhopper and Eland were upgraded to a 'Buy' the day before.

As an aside, following Delek's approach for Ithaca Energy, the analysts believe Faroe Petroleum is the "next obvious candidate".

"It seems unlikely that Delek would see Ithaca alone as providing enough North Sea scale."

Thus, within the exploration and production sector the broker says the best value lies in Rockhopper and Gulf Keystone.

Among integrateds, it still prefers BP over Total and Shell, with latter still over-indebted in their opinion.

In the services space it favours Wood Group/Amec, continues to be positive on Lamprell - owing to the potential for a recovery and Saudi upside - while Cape is "attractively valued".

Canaccord also "likes" SBM Offshore as new projects get going.