Southwestern Energy (NYSE:SWN) Capex Expected to Plunge

Citing low natural gas prices and dropping three rigs, UBS (NYSE:UBS) has slashed their price target on Southwestern Energy (NYSE:SWN).

"We believe the combo of SWN dropping 3 rigs and low gas prices is a signal it will reduce 2011 capex vs 2010. Thus, we lowered our ‘10 capex by - $100 MM to $2.0 bn, and 2011-12 capex by - $400 MM/year to $1.9 bn & $2.3 bn, respectively. As a result, we reduced our production growth forecast to 23% and 25% in 2011-‘12, (vs. - 30% per annum previously) and lowered our 2011-2012 EPS/CFPS to $2.15/$5.50 and $3.10/$7.45 from $2.20/
$5.70 and $3.25/$7.95, respectively," said UBS.

Southwestern closed on Friday at $33.84, gaining $0.20, or 0.59 percent. UBS lowered their price target on them from $56 to $45.

Barclays (NYSE:BCS) Recommends EOG (NYSE:EOG), QEP (NYSE:QEP), MEG (TSE:MEG)

Barclays (NYSE:BCS) weighed in on who they like in the energy sector, and the top company in their mind is EOG Resources (NYSE:EOG), followed by QEP Resources (NYSE:QEP) and MEG Energy (TSE:MEG).

They said about EOG, "Buy EOG Resources (NYSE:EOG) before the conference begins. US Oil volumes projected to rise - 70 percent (mid-point) by Q4. If EOG can support the aggressive forecast by convincing investors Eagleford well results have been in line then shares could rally. Impressive oil growth estimates of - 49%/70% in 2010E/2011E - EOG has first mover advantage in oil shales. Historic multiple of 2012 forecasts suggest share price rise of 50 percent higher by mid-2011."

Concerning MEG and QEP, Barclays said the low liquidity levels of the two companies have resulted in low investor interest in them. They believe if trading volume picks up on them soon they should do well.

Barclays said companies to stay away from include Ultra Petroleum (NYSE:UPL), Southwestern Energy (NYSE:SWN) and Range Resources (NYSE:RRC)