CHICAGO, Jan. 18, 2011 /PRNewswire/ -- Zacks.com Analyst
Blog features: BP Plc (NYSE: BP), Chevron Corp.
(NYSE: CVX), ExxonMobil Corp. (NYSE: XOM), Syneron
Medical Ltd. (Nasdaq: ELOS) and Cutera Inc. (Nasdaq:
CUTR).
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Here are highlights from Monday's Analyst Blog:
BP Joins Hands With Russian Oil Company
BP Plc (NYSE: BP) and Russia's state-operated oil company, Rosneft,
entered into a share-swap agreement, which allows the two companies
to jointly explore and develop parts of the Siberian Artic, a
highly prospective region. The deal is likely to close shortly
pending certain listing approvals and completion of some
administrative prerequisites.
Under the agreement, the U.K. oil giant will offer 5% of its
ordinary shares, valued at $7.8
billion, in exchange for 9.5% of Rosneft's shares. In the
initial exploration phase, the companies are expected to spend
around $1.4 billion to $2 billion on
seismic tests and drilling wells. Notably, while Rosneft will
benefit from BP's technology, the latter should gain access to
significant upstream reserves.
The alliance will finally allow BP access to explore hydrocarbon
reserves in the remote Arctic belt of Russia. The deal includes three license
blocks, EPNZ 1, 2, 3, covering approximately 125,000 square
kilometers in a prolific area of the South Kara Sea, part of the
Arctic Ocean off the northern coast of Siberia. The region is also expected to match
UK's North Sea with respect to size and prospectivity.
Russia, with a daily output of
more than 10 million barrels of oil, holds the world's top
position. The Arctic region, by itself, is expected to have a
reserve potential of 51 billion tons of oil, enough to cover
worldwide oil demand for four years or more. Consequently, the deal
enables BP, which already owns 1% of Rosneft, to strengthen its
position in the Russian hydrocarbon reserve, which was previously
off limits to foreign companies.
We see this latest deal as BP's yet another endeavor to fight
the oil spill aftermath. BP already holds an advantageous position
in Russia as compared with other
western oil companies like Chevron Corp. (NYSE: CVX) or
ExxonMobil Corp. (NYSE: XOM), through its 50-50 joint
venture, TNK-BP, with a group of Russian billionaire businessmen.
Russia already represents around a
quarter of BP's total production.
In the wake of rising global oil demand, we see the UK oil major
as benefiting from this long-term, strategic alliance with the
world's largest hydrocarbon-producing nation. But the deal is
attracting some negative responses from the U.S. political field,
with a few members of Congress raising national security concerns.
It remains to be seen if those initial concerns would translate
into more scrutiny of the deal.
We are maintaining our long-term Neutral recommendation on the
stock. BP currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating.
Syneron Bags FDA Clearance
Syneron Medical Ltd. (Nasdaq: ELOS), a worldwide
aesthetic products company, recently announced that it has been
granted 510(k) clearance by the U.S. Food and Drug Administration
(FDA) to market its latest Tanda Light Emitting Diode ("LED") to be
utilized for skin rejuvenation.
The new skin rejuvenation system is authorized to treat
rhytides, wrinkles and lines in the periorbital region (surrounding
the eye). The company expects to commercialize the system in the
second half of the current year, in both the consumer and
professional segments.
According to Syneron, its new Tanda Professional Rejuvenate red
light home use instrument is a useful addition for customers who
seek to cut down on wrinkles around the eyes with sophisticated
home light source. This technology provides a safe treatment option
for dermal rejuvenation, which effectively enhances collagen
production while enhancing dermal moisture. The company believes
that its new system will expand the indications for its Tanda LED
technology.
The Tanda skin rejuvenation system joins the Tanda line of
products from the former Pharos Life Corporation (a producer of
home-use light therapy devices for aesthetic procedures), which was
acquired by Syneron last month. This device uses an in-house
luminous LED array that provides concentrated streams of light for
fractional phototherapy effect.
This highly luminous LED enables the new Tanda system to deliver
five-times more power than the existing Tanda line of products,
thereby cutting down the requisite number of treatments to two each
week. The system builds upon the modular design of the Tanda group
of products.
Syneron (founded in 2000) markets Tanda products, directly to
customers, through premium retailers. Its product line-up includes
items for skincare for both the home-use and professional segments.
The company markets and supports its products in about 90
nations.
Syneron offers a comprehensive aesthetic product portfolio and a
global distribution setup. Its knowledge allows medical
practitioners provide sophisticated solutions for a wide range of
aesthetic requirements such as wrinkle reduction, hair removal and
body contouring. Syneron markets its products under two brands,
Syneron and Candela. It competes with Cutera Inc.
(Nasdaq: CUTR) among others.
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