Tullow Oil has seen its shares regain some ground after a poor couple of days.
After temporarily suspended drilling operations in northern Kenya following local demonstrations, a field in the Norwegian Arctic where Tullow has a 20% stake came up with a dry well which will now be plugged and abandoned.
But now Tullow has added 14p to 950p as Investec raised its rating on the group. Analyst Brian Gallagher said:
With Tullow down 27% since Jan, we upgrade to hold [from sell], viewing downside as limited near-term. We are not ready to move to a buy as we don't believe Tullow's valuation case is compelling at current levels. Moreover, we feel that both Tullow's cashflow strength and exploration competency, while superior to peers, continues to be overstated and overvalued by the market. We flag two pending and possibly game changing exploration catalysts (Fregate in Mauritania and Tultule in Ethiopia) which could force us to reassess our neutral stance, if successful.
