Oilexco: Lots of Upside Despite Disappointing Drilling Results

RBC Capital Markets analyst David Mestres Ridge is downgrading his target price on Oilexo Inc. (OILXF.PK) following a not-so-Merry Christmas of disappointing exploration results.

Mr. Ridge dropped his 12-month target to C$16.90 from C$21.00 because of unsuccessful drilling in the Morro and Coronado sites in the U.K.’s Central North Sea.

He went on to add that there is still exploration upside in the portfolio, noting Oilexco's two drilling vessels are still busy.

"The Sedco 712 is appraising and the Ocean Guardian has moved to appraise the Bugle prospect that Oilexco has 50% interest in," the analyst said, adding the company is also involved in drilling at the Mallory Project with the Noble Ton van Langeveld rig.

Mr. Ridge's downwardly revised target price still offers 38% upside, so he holds his “outperform” rating on the stock.