Nostrum Oil and Gas has target price slashed
Nostrum Oil and Gas shares have dived after RBC Capital Markets downgraded the stock from ‘outperform’ to ‘underperform’ and slashed its target price from 800p to 300p.
NOSTRUM OIL&GAS
£0.04
17:35 15/11/24
The investment bank said while it believed there is long-term value in the company, it said oil prices present a dilemma.
“Nostrum's revenues are impacted by continued weakness in the oil price, compounded by the recent decline in the Tenge (dropped 40% since the removal of the peg late August) and going into early 2016, roll-off of strong hedging position,” it said.
“We anticipate the company will have to choose between continuing to pay a meaningful dividend or drilling sufficient production wells in 2016 to maintain 2017 production guidance.”
It said it downgraded it until its 2016 plans and near-term operational momentum becomes clear.
At 1500 GMT, shares in Nostrum Oil and Gas were down 34.50p (8.86%) to 355p.