Following complaints the Oil Search board found CEO Kieran Wulff’s behaviour unacceptable and he has resigned as CEO.
The complaint also combined with the largest shareholder, Mubadala Investment, selling down a 4.5% stake and this may generate further negative sentiment until the motivation and chain of events are clarified, UBS asserts.
The announcement is incrementally negative, yet UBS believes the company can still progress financing and the sell down of the Alaskan oil project under the acting CEO from which point the stock can re-rate.
The broker believes the current share price undervalues the strategically attractive exposure to a top regional project in PNG LNG and Papua LNG. Buy rating and $4.60 target unchanged.
Target price is $4.60.Current Price is $3.92. Difference: $0.68 – (brackets indicate current price is over target). If OSH meets the UBS target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).