EXXI: Price Target Reduced as a Result of Regulatory Risk
EXXI (NASDAQ) Energy XXI
I am still high on this company, but, contrary to the party line, the drilling permits are still not flowing for shallow drillers such as EXXI, and I am afraid that this environment may persist beyond the short term, and possibly through the remainder of Obama's presidency. Only two permits have been issued since the early June release of new rules for shallow water drillers. This is a tiny fraction of normal permitting levels. I am cutting my price objective by $10, to $30-$40. As the lower end of this range is less than double the current share price, I may reduce my holdings to 5% of my portfolio.
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