Broker snap: Tullow IMS disappointing, but Evolution still says buy

9th Nov 2011 10:47

Despite shares in Tullow Oil taking a tumble on Wednesday due to the reduction to full-year production estimates, Evolution Securities says that it has made no changes to the stock's valuation and reiterated its buy rating."Group production for 2011 is now expected to average 79-81,000 barrels of oil equivalent per day (boepd) due to slower than expected ramp up from the Jubilee field," the firm said. Tullow also revealed that the Montserrado exploration well in Liberia has proven non-commercial.By 10:46, shares were down 6.13% at 1,348p, with the stock being the second-worst performer on the FTSE 100.Evolution said that the revelation was unsurprising: "The short term takeaway from today's IMS is slightly disappointing even though the market has been aware of the Jubilee ramp up issues for a while," said analyst Richard Griffith.Nevertheless, the broker said that bigger picture still remains very strong, given new developments in Ghana and a new basin opening exploration success in French Guiana. "Critically, there is no change to the current resource estimates."A 1,550p target price is kept.BC