Westhouse sees "substantial long-term value" at Tullow Oil

3rd Jul 2014 09:02

Tullow Oil "now offers substantial long-term value", according to Westhouse Securities, which repeated its 'add' recommendation for the stock.The broker said that Tullow's recent Capital Markets Day did not provide any material new information, but gave "a bit more granularity to the production outlook and showcased the depth and quality of the management team"."Tullow is now less an exploration-led E&P stock and more a diversified portfolio of substantial assets which are capable of delivering significant growth in production and cash flows over the medium term."Westhouse said that while the group will continue to devote significant spending to exploration, its priority over the next three to five years is to convert the resources discovered over the past six years - in Ghana, Uganda and Kenya - to production."We gained greater confidence in the sustainability of the Tullow business model from the Capital Markets Day and sensed that management is comfortable with the maturing nature of the asset portfolio."However, it said the key now for the company will be "execution and delivery".A 960p target price was maintained for the stock, which was trading 0.8% higher at 855.95p by 09:15.BC