Broker snap: Canaccord says Tullow Oil is 'not particularly attractive'

13th Feb 2013 13:34

Analysts at Canaccord continued to view the valuation of Tullow Oil as "not particularly attractive" after the oil and gas giant posted its annual results Wednesday.The group reported a 4.0% rise in profits before tax of $1.11bn for the year to December 31st, up from $1.07bn in the previous year.Sales revenues increased 2.0% to of $2.34bn year-on-year. Share rose 4.32% to 1,231.00p at 13:42 after the results. Canaccord said it was promising news for the company following a disappointing announcement about a dry well at Sapele, offshore Ghana, and a lower than expected plateau rate at the Tweneboa-Enyenra-Ntomme (TEN) Cluster Development."Next important news is the Sabisa well, onshore Ethiopia, currently drilling," it said. "This will be an important well, bracketing the potential to the north of the Kenya-Ethiopia trend. This well is being drilled in a separate basin from those drilled to date."The broker added that Tullow trades with 39% downside to its central net asset value (producing and development assets) compared to the likes of Premier with a 22% upside. "However, Tullow has been a big underperformer, underperforming Premier by around 23% year-to-date and we expect a bit of a bounce today with the potential for some short covering."