Cowen Downgrades Two-Thirds Of E&P Coverage Portfolio

In a report published Monday, Cowen And Company analyst Ryan Oatman suggested that companies within the Oil & Gas Exploration & Production sector could see approximately 50 percent downside to 2017 consensus estimates.

According to Oatman, he sees a "stronger" outlook for U.S. production, the likelihood of the Iran deal surviving and a belief that oil price strip at current levels is "appropriate" through 2017.

"Lower anticipated oil prices cause us to reduce capital spending estimates for many names under coverage, which in turn cuts production and cash flow estimates," Oatman wrote. "Our 2016 production and operating cash flow estimates are 4 percent and 35 percent, respectively, below the consensus view. Looking out to 2017, we see 10 percent downside to the consensus production estimate and 51 percent downside to the consensus cash flow estimate."

Coverage Thesis Overview

• Abraxas Petroleum Corp. (NASDAQ: AXAS) was maintained at Market Perform with an unchanged $2 price target.
• Bill Barret Corporation (NYSE: BBG) was downgraded to Underperform from Market Perform with a price target lowered to $1 from a previous $5.
• Bonanza Creek Energy Inc (NYSE: BCEI) was downgraded to Underperform from Market Perform with a price target lowered to $4 from a previous $10.
• Callon Petroleum Company (NYSE: CPE) was downgraded to Market Perform from Outperform with a price target lowered to $9 from a previous $13.
• Clayton Williams Energy, Inc. (NYSE: CWEI) was downgraded to Underperform from Market Perform with a price target lowered to $35 from a previous $40.
• Denbury Resources Inc. (NYSE: CPE) was downgraded to Underperform from Outperform with a price target lowered to $3 from a previous $6.
• Energen Corporation (NYSE: EGN) was maintained at Market Perform with a price target lowered to $54 from a previous $60.
• Diamondback Energy Inc (NASDAQ: FANG) was downgraded to Market Perform from Outperform with a price target lowered to $75 from a previous $93.
• Northern Oil & Gas, Inc. (NYSE: NOG) was downgraded to Underperform from Market Perform with a price target lowered to $4 from a previous $5.
• Oasis Petroleum Inc. (NYSE: OAS) was maintained at Outperform with a price target lowered to $14 from a previous $18.
• PDC Energy Inc (NASDAQ: PDCE) was downgraded to Market Perform from Outperform with a price target lowered to $55 from a previous $72.
• Parsley Energy Inc (NYSE: PE) was downgraded to Market Perform from Outperform with a price target lowered to $19 from a previous $23.
• QEP Resources Inc (NYSE: QEP) was maintained at Outperform with a price target lowered to $19 from a previous $23.
• Synergy Resources Corp (NYSE: SYRG) was downgraded to Market Perform from Outperform with a price target lowered to $9 from a previous $14.
• Whiting Petroleum Corp (NYSE: WLL) was maintained at Outperform with a price target lowered to $26 from a previous $33.