Raymond James cuts Pengrowth; shares fall

Mon Jun 25, 2012 1:25pm EDT
 
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(Reuters) - Raymond James lowered its rating on Pengrowth Energy Corp PGF.TO to "market perform" from "outperform", citing uncertainty around the company's capital expenditure and dividend plans in the current commodity price environment.

Shares of the oil and gas producer fell as much as 7 percent to a more than two-year low of C$6.08 on Monday on the Toronto Stock Exchange.

West Texas Intermediate crude and Brent crude have both fallen about 30 percent since their February highs.

"We expect that the company will be reviewing spending and the monthly dividend in the context of lower commodity prices near-term to help manage debt levels," the brokerage said in a research note.

Pengrowth had about C$1 billion in long-term debt as of March 31.

The company has been paying a monthly dividend of 7 Canadian cents per share since November 2009, according to Thomson Reuters data.

(Reporting by Shounak Dasgupta in Bangalore; Editing by Sriraj Kalluvila)