March 4 (Bloomberg) -- OGX Petroleo & Gas Participacoes SA, the oil producer run by billionaire Eike Batista, extended a 15 percent slump last week to the lowest in more than four years after Deutsche Bank AG cut its target price for the shares.
OGX, based in Rio de Janeiro, fell 4.6 percent to 2.90 reais at the close in Sao Paulo, the lowest since Nov. 12, 2008. OGX led losses and was the most-traded stock by volume on the benchmark Bovespa index, which declined 0.7 percent.
OGX is likely to relinquish areas in Brazil’s Campos basin by a March 12 deadline and that would lead to lower recoverable oil volumes, Deutsche’s Marcus Sequeira, the stock’s most accurate analyst in a Bloomberg Absolute Return Ranking, said in a note to clients today. OGX is still trading at expensive levels, Sequeira said, after he cut the target price for the company to 2 reais from 3.8 reais.
“There is a high likelihood of OGX returning blocks, thus supporting our much lower than consensus recoverable volume estimates,” Sequeira wrote. “Despite the sharp decline in the shares, the stock is still expensive.”
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