TransGlobe shares fall after Jefferies downgrade to hold

NEW YORK, Jul 01, 2008 (Thomson Financial via COMTEX) -- TGA | Quote | Chart | News | PowerRating -- Shares of TransGlobe Energy fell Monday after the company was downgraded to hold from buy at Jefferies & Co., which said there was limited upside for the stock until the company can better quantify its exploratory reserve potential.

"While we appreciate the upside that could be offered by TransGlobe's unexplored acreage in Yemen, until we get a better sense for the actual reserve potential, we cannot attribute any incremental value for those assets," the firm wrote, cutting its price target on the company to $5.25 from $6.50.

The company has three unexplored blocks in Yemen, with drilling for one block expected to being later this summer. Drilling on the other blocks will begin later this year and in 2009.

While the blocks could offer "considerable exploratory upside" for the company over the next few years, Jefferies said it didn't have enough information to assess the potential right now. If the program "begins to bear fruit," Jefferies added, it could revisit its rating.

Shares of TransGlobe fell 2.3% to $5.19 on Monday. Ryan Vlastelica rv/pc

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