ING Barings has raised its ratings of the shares of several oil and gas companies.
ING raised Burlington Resources to strong buy from hold, Transocean Offshore
to strong buy from buy and Ocean Energy Inc. to buy from hold. On Transocean, analyst Stephen Gengaro wrote: "We believe the stock has lagged the group because of the relatively high level of contract rollovers over the next six months, which includes some of the company's high-specification semis currently working at high day rates. "While these rollovers will likely keep pressure on earnings over the next several quarters, we do not expect the company to sign any long-term contracts at low day rates that would cause a longer-term drag on earnings." Transocean operates one of the highest-quality deep-water fleets in the industry and has an excellent management team, he wrote.
Burlington Resources was raised to strong buy with 12-month target of $52-55 a share, analyst Michael Schmitz wrote. Increasing 1999 estimate to $0.73 a share from $0.54 and 2000 estimate to $1.50 a share from $1.15 based on increased crude oil and gas price forecasts.
Ocean Energy upgrade also reflects increased crude oil and natural gas price forecasts, he said. Ocean is well-positioned to return to a growth mode. With a strengthened financial position and improved cost structure, the company plans to drill 9-12 high impact exploration prospects during the next 18 months which could give it significantly more reserve potential, he said.