Broker snap: Better options in sector than Tullow

5th Jul 2011 13:51

The first half update from oil firm Tullow Oil was slightly negative, in finnCap's view, and the broker continues to see better options elsewhere in the sector.Production and revenues were both lower than expected, finnCap asserts, while underlying production guidance for the full year was cut, although the headline numbers were raised to take into account the effect of two recent acquisitions. "With few high impact exploration wells in H2 [the second half] and the stock continuing to trade at a significant premium to NAV [net asset value], we see better value and upside potential elsewhere in the sector," analyst William Arnstein said. "Sell Tullow; Buy Salamander and Premier," is finnCap's advice.