1st July 2015
As Tullow Oil report its H1 figures, Graham Spooner, investment research analyst at The Share Centre, explains what they means for investors…
“Despite declining profits in the first half of the year, this morning Tullow Oil reported an encouraging trading update with production increasing 4% on the same period last year.
“Tullow Oil has felt the pain of the plunge in the price of oil, as revenue fell by 38% to $800m. The company has taken steps to offset this and is targeting cost saving in the coming year. We feel positive about the good progress reported in its West African projects, where guidance for the remainder of the year has increased to 66,000 – 70,000 barrels of oil per day. Looking forward for investors, exploration projects in East Africa have also shown good results and are supported by the governments in Kenya and Uganda.
“We currently recommend Tullow Oil as a ‘buy’ for contrarian investors, willing to accept a higher level of risk. The stock is highly geared to the oil price, and will benefit from any longer term recovery.”