Oil major Tullow (LON:TLW) is in the frame Friday as it issues a trading statement.
It comes as the FTSE100 oiler has been blighted by a run of exploration disappointments that have helped drag down the stock around 44% in the year so far.
But broker Westhouse was upbeat last week: "The market has punished Tullow for a disappointing run in exploration and a concern about the impact of lower oil prices, but the reality is that Tullow possesses assets that could potentially deliver top tier production and cash flow growth in coming years."
It upgraded the shares to 'buy' from 'add', targeting 770p (current price: 477.3p).
Analyst Mark Henderson reckons Tullow, an E&P focused on Africa and the Atlantic margins, offers the prospect of strong production growth at 13.5% compound annual growth rate (CAGR).
It also offers 'very strong' pre-tax operating cash flow growth (20% CAGR to 2018) with even stronger growth beyond 2018, as its East African assets start to deliver production, he said.
That growth comes despite the firm's substantial reduction in anticipated 2015 exploration spend, reflecting lower expectations for the oil price, reduced commercial success from offshore drilling and a failure thus far to secure a farm-out partner for the TEN development, off the coast of Ghana.
It is limiting 2015 exploration to basin opening activity in Kenya and Ethiopia and exploration drilling offshore Norway, where the government effectively funds 78% of exploration drilling, noted the broker.
Significant announcements expected:
Companies: Interims: Alpha Real Trust (LON:ARTL)
Finals: Future (LON:FUTR), Tracsis (LON:TRCS)
Trading statement: Spirax-Sarco Engineering PLC (LON:SPX), Admiral Group PLC (LON: ADM), Tullow Oil PLC (LON: TLW)
Economic: EU: ECB president’s speech.