A Parex drilling rig in Colombia (Company)

A Parex drilling rig in Colombia (Company)

The Globe and Mail reports in its Tuesday edition that RBC analyst Nathan Piper upgraded Parex Resources ($5.95) to "outperform" from "sector perform." The Globe's Darcy Keith writes in the Eye On Equities column that the upgraded came in the wake of Parex posting a cash-flow funded 2014 capital plan that is expected to deliver further production and reserves growth. Mr. Piper says: "Into 2014, Parex continues to demonstrate an ability to grow production while addressing our previous concern around reserves life (grown to over 4 years). ... This ability to consistently address preconceptions around high production declines (and short reserves life) associated with the Llanos basin has caused us to revisit our view on the stock." Llanos Basin is in Colombia and Mr. Piper now believes management has a clear strategy to build a sustainable 15,000 barrel-per-day light oil business onshore in the country. He thinks this should make Parex increasingly attractive to potential suitors. "Following the acquisition of other light oil producers, Parex has reached a scale that could at some point interest the major heavy oil producers such as Ecopetrol and (possibly) Pacific Rubiales." He hiked his target to $11 from $8.

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Source: Stockwatch