UPDATE: Oppenheimer Downgrades LRR Energy LP Following In-Line 3Q14 Results

In a report published Monday, Oppenheimer analyst Bernard Colson downgraded the rating on LRR Energy LP (NYSE: LRE) from Outperform to Perform, and removed the $20.00 price target.

In the report, Oppenheimer noted, “We downgrade LRE to Perform from Outperform and remove our $20 price target after the company reported in-line 3Q14 results. We believe LRE is in a difficult predicament as it enters a period of weaker oil prices with falling distribution coverage, limited capacity on the credit facility, and a rising cost of capital. It may be even more difficult (but absolutely imperative) for LRE to acquire assets in this environment. While we are not concerned about distribution safety in 2015, the period between now and 2016 is pivotal to distribution sustainability. The negatives here are balanced by a high current yield (12.3%), which keeps us from an Underperform rating. We are updating estimates following 3Q results.”

LRR Energy LP closed on Friday at $16.31.