Wednesday December 3, 12:28 PM
STOCKS NEWS UK SMALL-Melrose Resources down on capex cuts
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12:12GMT 03Dec2008-Melrose Resources (LSE: MRS.L - news) down on capex cuts
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Shares in Melrose Resources slide 5.7 percent to 197 pence after the oil and gas explorer says it will cut back on investment in 2009 due to falling oil prices and that production levels will likely drop before recovering in 2010.
However, analysts at Brewin Dolphin (LSE: BRW.L - news) say the group's lower capital expenditure forecast is sensible in the current environment, and that Melrose (LSE: MRO.L - news) , as the operator of its assets, can retain total control of such expenditure.
'Capital expenditure next year will be approximately $165 million, down from this year's level of around $220 million ... The share price has come back with the rest of the sector as the oil price has fallen in the second half but we believe this has been overdone,' they say, holding a 'buy' rating on the stock.
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