Jefferies downgrades Tullow to 'hold'

"Ghana production remains the most positive element of current operations but with both Uganda & Kenya final investment decision timings still uncertain, Tullow needs a new material, commercial asset to drive the stock," Jefferies said.

It added that the highly anticipated Jethro exploration well, offshore Guyana, is the event to provide it but pre-drill risked value is close to being fully priced in.

Jefferies argued that trading at $26/boe per 2P reserves, Tullow remains at a premium valuation.

"Project sanction of Uganda would add 120mmboe of net 2P reserves we estimate, reducing the 2P metric to $18.4/boe and deleverage to our $2.46bn YE19e net debt would reduce the metric to $17/boe," it said.

At 1130 GMT, the shares were down 0.5% to 221.20p.