- BP (BP -5.3%) is downgraded to Underperform from Neutral at BofA/Merrill, which foresees a shortfall in free cash flow as the company faces a three-legged “trilemma” in accordance with the need to maintain dividend, credit rating and its reserve basis.
- BofA projects falling refining markets at European Integrated oil companies, with the decline in the midstream industry expected to be below “mid-cycle levels” by 2016, which will cause companies to cut capex in order to maintain and deliver dividends on time.
- The firm prefers exposure to Lundin Petroleum (OTCPK:LNDNF) and Genel (OTCPK:GEGYF) due to the high quality of their exploration and production sectors.