Canaccord lowers target price on 'speculative buy' Tullow Oil

Analysts at Canaccord Genuity lowered their target price on exploration and production firm Tullow Oil from 275p to 260p on Wednesday, stating the group's first-half results highlighted the company's need to "unstick" its East African projects and find a new area of growth.

Canaccord said that Tullow's long-running sagas in East Africa had continued with "not much more certainty of the end game", and when combined with a production downgrade - the firm's second trim so far this year - there was an overall sense that the group needed "some fresh impetus" to provide increased market appeal.

The Canadian broker conceded that in the near term, that may come from Guyana where a three-well exploration drilling campaign was underway, but without some real success there, Canaccord thinks that near-term organic transformation opportunities at Tullow looked "limited".

While Canaccord said it still saw an upside to its new target price of 260p, the analysts felt that with important near-term exploration drilling results from Guyana due as early as mid-August, that it was time to reduce its rating to 'speculative buy' from 'buy'.