Broker snap: Credit Suisse initiates Rockhopper at outperform

6th Jan 2012 10:21

Analysts at Credit Suisse have this morning initiated coverage on Falklands focused oil exploration group Rockhopper Exploration at 'outperform'.Their valuation model for the company gives a 'risked' net asset value for the firm´s shares, under a successful 'farm out' agreement for its Sea Lion oil field, of 627p per share, which is 230% above the current share price. There are risks however, an unsuccessful farm-out could have a negative impact on the stock. They estimate that under such circumstances the company´s 'risked' net asset value could decrease to less than 200p per share.Two other possible positive catalysts for the company´s share price are: 1. The potential for growth from an upgrade in resource volumes by end 1Q 2012 (+35 pence per share potential). 2. M&A upside given that the outfit has the largest holding of undeveloped resources in the Falklands basin.AB