Oil analysts at Goldman Sachs reckon Tullow Oil plc (LON:TLW) is ‘operationally sound’ but the share is ‘expensive’ and as such they rate the Africa focussed E&P as a sell.
“We see some near-term risk to the production figures from the TEN field, until additional wells can be drilled post 2017,” analyst Duncan Milligan said in a note.
“We view the stock as pricing in closer to US$70/bl than our long-term assumption of US$60 per barrel.”
Goldman’s sell rating comes with a 221p price target, suggesting Tullow is about 30% too expensive in the US bank’s estimation.
Elsewhere Gulf Keystone Petroleum suitor DNO is seen as a ‘sell’, while Kurdistan peer Genel Energy PLC (LON:GENL) was rated as ‘neutral’.
“We think the Kurdistan fields remain very low-cost production but think payment concerns may reduce near term capital expenditure, in turn leading to lower near-mid term production,” the analyst added.