OSH – UBS rates the stock as Buy

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Oil Search has announced a US$700m capital raising at $2.10 a share as well as a nine-month extension to its US$300m facility. Production and capital guidance has been maintained.

UBS estimates now reflect the extra shares on issue and an oil price forecast of US$35/bbl in 2020. Easing of concerns over the balance sheet should enable a market to focus on internal options, the broker suggests.

Buy rating maintained. Target is raised to $3.10 from $2.70.

Sector: Energy.

Target price is $3.10.Current Price is $2.57. Difference: $0.53 – (brackets indicate current price is over target). If OSH meets the UBS target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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