Northern Lights: Investment Opportunities in the UK North Sea

By Edison Investment Research, PRNE
Monday, March 28, 2011

Edison Investment Research Oil & Gas sector report

LONDON, March 29, 2011 - Despite the negative sentiment around the UK government increasing the
marginal tax rate from 50% to 62% in last week's Budget, the North Sea
independents continue to offer the potential for spectacular returns. The
average share price increase from the companies profiled in this report was
192% over the last 12 months. In the coming year, we believe Premier Oil,
Nautical Petroleum and Encore Oil offer the best value potential, with high
impact upside from Faroe Petroleum and Deo Petroleum.

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We highlight Premier Oil, Nautical Petroleum and Encore Oil as companies
where the risk reward balance is skewed in the favour of value creation. We
believe Valiant and Endeavour at present should be avoided. Serica and Xcite
have the potential to become more attractive if they derisk their prospects
further, while Faroe and Deo Petroleum both provide high impact exploration

Edison is Europe's leading investment research company. It has won
industry recognition, with awards in both the UK and internationally. The
team of more than 65 includes over 35 analysts supported by a department of
supervisory analysts, editors and assistants. Edison writes on more than 280
companies across every sector and works directly with corporates, investment
banks, brokers and fund managers. Edison's research is read by major
institutional investors in the UK and abroad, as well as by the private
client broker and international investor communities. Edison was founded in
2003 and is authorised and regulated by the Financial Services Authority

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