UBS analyst Roni Biron has reiterated his recommendations for the Tamar and Leviathan partners, and raised most of his target prices for the shares, following gas supply contracts for Tamar and the revised deep strata data for Leviathan.
Biron raised his valuations for Tamar to $7.4 billion from $6.6 billion and raised its valuation for Leviathan to $4.9 billion from $4.5 billion, after raising its blended price estimates for both gas discoveries. He raised the price estimate for Tamar to $5.75 per million cubic foot (Mcf) from $5.25 per Mcf following the latest gas supply contracts, which imply prices of more than $6 per Mcf, while reiterating its price estimate for Israel Electric Corporation (IEC) (TASE: ELEC.B22) at $5.25 per Mcf. It also raised its price estimate for Leviathan $9.40 per Mcf from $9.15 per Mcf, assuming 40% domestic sales.
Biron says that Tamar partner Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), which is most sensitive to domestic prices, is the key beneficiary of its revised estimates. UBS raised its target price 12% to NIS 0.57 from NIS 0.51, but reiterated its "Neutral" recommendation.
Biron also raised his target prices for Delek Group Ltd. (TASE: DLEKG) companies by 3-5%, but cut its target price for Leviathan partner Ratio Oil Exploration (1992) LP (TASE:RATI.L) by 2% to NIS 0.50 from NIS 0.51, while reiterating its "Buy" recommendation.
Biron reiterated his "Buy" recommendation Delek Group, Avner Oil and Gas LP (TASE: AVNR.L), Delek Drilling LP (TASE: DEDR.L), and raised the target prices as follows: Delek Group to NIS 970 from NIS 940; Avner to NIS 3.30 from NIS 3.10; and Delek Drilling to NIS 18.50 from NIS 17.80.
Delek Group's share price fell 0.9% by early afternoon to NIS 788.10, Avner's share price rose 0.2% to NIS 2.70, Delek Drilling's share price rose 0.3% to NIS 15.46, Isramco's share price fell 0.4% to NIS 0.509, and Ratio's share price rose 0.6% to NIS 0.365.
Published by Globes [online], Israel business news - www.globes-online.com - on January 19, 2012
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