Broker snap: Investec disappointed with output at Tullow

11th Jan 2013 11:01

Investec has retained its 'sell' rating and 1,000p target price for oil giant Tullow following a production miss on Friday morning.Group working interest production last year averaged just 79,200 barrels of oil per day (bopd), below the company's own guidance of 80,000-84,000 bopd and Investec's 82,000 bopd estimate. This was due to the enforced shutdown of Tullow's non-operated production in the CMS area of the UK in early December following safety issues, which have now been resolved.Investec also pointed out that, for 2013, Tullow has cut its production guidance to 86,000-92,000 bopped, below the previous guidance of 95,000 bopped.The broker said: "This morning's trading update delivered disappointing production figures for Tullow and underlined our view that it may not attain production of 100,000 bopd or more until as late as 2018 (disposal dependent). "This will put greater pressure on the exploration portfolio to deliver exceptional results, we think."The broker said that while it the business is still a "best-in-class explorer", there are "ongoing challenges for Tullow as it continues to seek the right balance between the 'E' and 'P' sides of its portfolio".Shares were down 4.98% at 1,164p by 11:00.BC