OGX May Gain 181% in 12 Months After Selloff, BTG Pactual Says

OGX Petroleo & Gas Participacoes SA’s shares may jump 181 percent in the next 12 months after a plunge last week brought the stock to an “appealing” price, Banco BTG Pactual said.

Shares in the oil company controlled by billionaire Eike Batista may reach 17.63 reais in the next 12 months, BTG Pactual’s analyst Gustavo Gattass wrote in a note to clients today. The stock closed at 6.28 reais yesterday.

OGX plunged 41 percent last week, the biggest slump on record, after saying it plans to stabilize production at each of its first two wells at the Tubarao Azul field in the Campos Basin at 5,000 barrels a day, down from a previous plan to pump as much as 20,000 barrels daily at each well.

“OGX has enough cash to support its business,” Gattass wrote. “We believe that from the selloff and in spite of the new outlook there has come an appealing value.”

The stock gained 3 percent to 6.47 reais at 10:38 a.m. in Sao Paulo today. The benchmark Bovespa index gained 0.3 percent.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net