Morgan Keegan Rates Mission Resources as Outperform

Analysts at Morgan Keegan initiate coverage of Mission Resources Corporation (MSSN) with an "outperform" rating. The fair value is set to $4.00.

Shares of Mission Resources Corporation, an oil and natural gas company, are currently trading at $2.30.

According to Morgan Keegan's research note published yesterday, the company drills and develops natural gas properties, primarily in Louisiana, the Gulf of Mexico and the Texas Gulf Coast. The company has been posting weak results over the past few years. However, Mission Resources is currently undergoing a comprehensive turnaround, through managerial restructuring and various reforms, the analysts say. The company's debt and cost metrics have improved significantly in the recent past, Morgan Keegan adds.

According to Morgan Keegan, Mission Resources' cash costs are expected to decline substantially over the next couple of years. The company has benefited from its transition from oil assets to natural gas assets over the past few years. Mission Resources has sold its high-cost reserves over the past couple of years to acquire the high-value Jalmat asset, the analysts add. Morgan Keegan expects the acquisition to be highly accretive to the company in the forthcoming years.

The EPS estimate for 2004 is -$0.08.

Morgan Keegan initiates coverage of Mission Resources Corporation with an "outperform" rating.
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