(MENAFN- ProactiveInvestors)Tullow Oil's (LON:TLW) risky growth ventures are too reliant on debt based funding warns broker Cantor Fitzgerald which has today issued a 'sell' recommendation for the FTSE 250 stock. Analyst Sam Wahab says Tullow's share price has 'remained steady' in 2015 so far as the group faced up the challenges in the wake of crude oil's recent slump. But as a result Wahab reckons Tullow's shares will come under fire if there is any more bad news. 'In order to withstand the current subdued macro environment the company has increased and diversified its sources of debt capital reduced its exploration expenditure implemented significant cost saving initiatives and suspended its dividend' he said in a note. 'We believe however that an overreliance on debt to fund risky ventures could prove costly.' Any unsuccessful exploration attempts will weigh on the company's shares Wahab explains. 'In the absence of production upgrades against the backdrop of large investment the near term share price will need to be supported through success with the drill-bit in our view.' 'Although the company has budgeted less spend for pure-play exploration this year we believe Tullow requires success here to stem the current drift in the share price.' Cantor today issues a 'sell' note on Tullow and the price target of 342p suggests some 12% of downside from the current price of around 390p. In his valuation Wahab ascribes 146p per share to Tullow's producing assets as well as 475p for its other resources and exploration assets though he also factors in some 342p per share for Tullow's financial liabilities.
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