TXCO Resources hits 10-year low

NEW YORK - Shares of TXCO tumbled to a record low on Friday after an analyst downgraded the oil and gas producer, citing low-trending oil prices which threaten to dramatically reduce drilling in 2009.

TXCO shares fell 15 cents, or 7.5 percent, to $1.86 Frida, after earlier plunging 49 cents, or 24 percent, to a 10-year low of $1.52.

Light, sweet crude for January delivery settled at $40.81 a barrel in New York, down by nearly $3 per barrel. Prices fell as low at $40.50, levels last seen in December 2004. Crude prices have shed over 70 percent of their value since their July peak of $147.27.

Chris Pikul, an analyst with Morgan Keegan, on Friday said he expects low oil prices to persist, and believes the subsequent lower cash flow will force a drastic pullback in drilling in 2009. Pikul downgraded TXCO to "Market Perform," from "Outperform."

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