Broker snap: Citigroup trims Tullow price target

1st Apr 2011 12:19

Citigroup has trimmed its price target on Tullow Oil to reflect the lower than expected price the oil group secured when it sold two-thirds of its Ugandan acreage to French oil group Total and China's CNOOC.It now has a 1,590p target price on the stock, down from 1,650 previously. It keeps its "hold/high risk" stance on the stock."While the sale proceeds were lower than our estimate of US$4bn pre-tax, it is a welcome conclusion to the stalled sale process, which was originally announced in January 2010," the broker said.Citi notes that Tullow's production could rise dramatically if drilling is successful in the Lake Albert basin in Uganda. Tax disputes Tullow is trying to resolve should not slow planned operational activity, it adds.RG