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Published on Jul 29, 2016
Panmure
Gordon analyst Colin Smith says he has a ‘constructive view’ about oil
prices and the exploration and production sector generally, but he
remains a seller of Tullow Oil Plc (LON:TLW) and this week downgraded
his target price.
“The key reason for our downgrade was they [Tullow] released new information about anticipated production in 2017 and 2018 which looks rather lower than the numbers that I was carrying,”
The analyst, who rates Tullow as a ‘sell’, said the company’s main problem the group’s debt burden.
“I think when you do the arithmetic you find that the amount of cash flow that’ll be needed to go to debt holders will mean there’s a rather limited amount for the equity holders.”
Looking elsewhere in the sector Smith highlights Pantheon Resources (LON:PANR) as Panmure’s ‘top pick’ in the sector. He describes it as a great asset story, and said the company isn’t challenged by its balance sheet.
http://www.4-traders.com/TULLOW-OIL-PLC-9590152/
http://www.4-traders.com/PANTHEON-RESOURCES-PLC-4006002/
“The key reason for our downgrade was they [Tullow] released new information about anticipated production in 2017 and 2018 which looks rather lower than the numbers that I was carrying,”
The analyst, who rates Tullow as a ‘sell’, said the company’s main problem the group’s debt burden.
“I think when you do the arithmetic you find that the amount of cash flow that’ll be needed to go to debt holders will mean there’s a rather limited amount for the equity holders.”
Looking elsewhere in the sector Smith highlights Pantheon Resources (LON:PANR) as Panmure’s ‘top pick’ in the sector. He describes it as a great asset story, and said the company isn’t challenged by its balance sheet.
http://www.4-traders.com/TULLOW-OIL-PLC-9590152/
http://www.4-traders.com/PANTHEON-RESOURCES-PLC-4006002/
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