One to Watch

EnQuest105p +2pScotsman says BUY

ENQUEST is filling the gap in the market vacated by Venture Production as the London main market's only oil production play. The company listed in April with an attractive valuation and we expect development-led growth to push shares up.

EnQuest is led by an experienced team that has considerable relevant experience. It listed debt-free and cash generative so management is well placed to pursue a development-led growth strategy that is accelerated by acquisitions.

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Reserves and production growth from 81mmboe and 13,600b/d, respectively, should come from reinvestment in the Heather and Thistle production hubs. Headline valuation metrics are in line with peer group averages.

We would note that EnQuest is highly exposed to fluctuations in the oil price. A $10/bbl shift in the long-term oil price outlook would generate a 20 per cent swing in our net asset value. The commercial viability of the some of the more mature fields looks challenging below $70/bbl oil.

• Investment markets and conditions can change rapidly and as such the views expressed should not be taken as statements of fact nor should reliance be placed on these views when making investment decisions. Past performance is not a guide to the future.


96.5p -4p

Broker says BUY

CHRYSALIS is at an inflection point, according to KBC Peel Hunt, as it debt changes from a "draw-down phase to a repayment phase". KBC added: "Good operating cash flow is the most compelling way to service debt. A consequence of this will be a potentially transforming shift in earnings. The acquisition of First State Media is a first step."


365.5p -26.05p

Broker says BUY

OIL giant BP looks "increasingly likely to suspend dividends" according to Evolution. The broker said: "The sell-off is overdone but logic left the stage weeks ago. We don't believe BP has a funding issue but the company may decide to suspend payments until the wells are capped."