Oslo shares close lower, led down by PGS, Schibsted; REC higher UPDATE

(Updating with full report)

OSLO (Thomson Financial) - Share prices closed lower, led down by Petroleum Geo-Services, which traded ex-dividend and was hit by a broker downgrade, and by Schibsted, while Renewable Energy Corporation recovered from yesterday's losses.

The OSEBX Benchmark index closed 1.57 points higher at 506.31, while the OSEAX All Share index fell 0.911 points to 580.94.

Total turnover was 15.88 bln nkr.

Petroleum Geo-Services closed 13 nkr lower at 153 as the share started trading without a dividend of 10 nkr and was hit by a broker downgrade.

DnB NOR Markets cut PGS to 'hold' from 'buy' following yesterday's 275 mln usd acquisition of Edinburgh University spin-out MTEM, which specialises in electromagnetic surveying.

Thor-Andre Lunder at DnB NOR Markets said he does not expect Petroleum Geo-Services to be in a position to compete with Electromagnetic Geoservices (EMGS) in the deepwater market before 2010, despite yesterday's acquisition of MTEM.

Lunder said that while the MTEM acquisition was a step in the right direction, the 275 mln usd price paid was much higher than the 190-200 mln figure he believes would have been more reasonable.

EMGS rose 2.5 to 117.

Prosafe added 0.5 to 96.3. Norwegian financial research firm Investtech said recent weakness provides a good opportunity to buy into the offshore services firm, according to dealers.

Investtech pointed out that Prosafe has fallen back against the background of a stronger overall sector, and that therefore the current price provides a good buying opportunity.

DNO was up 0.4 at 12 after additional testing of its latest well at the Tawke field in Northern Iraq produced an aggregate test production capacity of 9,000 bpd, ahead of the 7,000 bpd figure announced after initial testing.

The Norwegian oil minnow is in the process of starting production from the Tawke find, less than 12 months after the field was first discovered.

According to analysts, the stock is being pushed higher by the latest good news from Iraq.

'Tawke is key to DNO's prospects, so any good news at such a crucial stake is likely to have a positive effect on the stock,' one analyst said.

Statoil rose 0.25 to 177.5 on news its latest well at the Hassi Mouina licence in Algeria's Sahara Desert has proven the presence of gas, although no details were given on the size of the find.

Norsk Hydro added 1 to 226.25.

Golar LNG was unchanged at 102.5 and IM Skaugen added 0.5 to 53.5. DnB NOR Markets named them as its preferred buys in the liquefied petroleum gas sector, dealers said.

DnB NOR Markets said a study of the sector had shown that rate developments so far this year have been disappointing. Despite this, however, the broker said there continue to be good opportunities with individual shares.

The broker said it has 'buy' recommendations on both stocks, with price targets of 115 and 57 nkr a share respectively.

Seadrill was 2.75 lower at 129 and Frontline shed 5 to 271.

Schibsted was down 6 at 285. It will ask for an independent assessment of the proposed 'Media Norge' newspaper consortium if the Norwegian Media authority rejects the plans next week, as expected.

Orkla was unchanged at 107.25.

Renewable Energy added 2 to 218, recovering from recent losses after the company said it will invest 74 mln skr in increasing its solar module production by 50 MW in Sweden, bringing the total capacity of the firm's Glava plant up to 150 MW.

Chief executive Erik Thorsen said the investment is a relatively fast and cost-efficient way of gaining additional capacity and improving the long-term cost position of the plant.

Yara International shed 1.5 to 186. It launched its mandatory offer for all the remaining shares in Finland's Kemira GrowHow, at the previously-announced price of 12.12 euros per share.

Norske Skog was down 0.6 at 89.9.

Aker Kvaerner fell 0.5 to 150.25. The group was awarded a gold mine engineering project in Peru by New York-listed precious metals group, Compania de Minas Buenaventura, without disclosing financial terms.

Aker Yards shed 0.5 to 104.5.

Telenor was up 1 at 116. The group will make a gain of about 111 mln euros on the sale of its 17.45 pct stake in Austrian telecoms group ONE GmbH.

Analysts welcomed the news, while Carnegie said the sale is not expected to have a significant effect on operations and maintained its 'outperform' recommendation.

Ementor was down 0.25 at 54.75. The group has won a three-year IT deal with the Norwegian Public Roads Administration (Statens Vegvesen), worth 100 mln nkr a year. The agreement also includes two one year options.

Fast Search & Transfer shed 0.2 to 13.45, while EDB Business Partner added 1 to 54 and Tandberg rose 0.75 to 132.

Storebrand fell 0.6 to 93.8 and DnB NOR shed 0.4 to 77.6. [e-mail] mdl/rfw COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.