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Summary
- Tullow Oil PLC had delivered a decline in total revenue to around USD 1,396 million during FY20.
- TLW had completed the disposal of Uganda assets worth USD 575 million during November 2020.
- TLW would complete the transaction involving the disposal of assets in Equatorial Guinea (‘EG”) and Dussafu Assets by H1 FY21.
- TLW had a net debt of USD 2.4 billion as of 31 December 2020.
Tullow Oil PLC (LON:TLW) is the LSE listed energy stock. TLW’s shares have generated a return of approximately 230.31% in the last 12 months. It is listed on the FTSE All-Share Index. TLW was incorporated in 2000.
Business Model
Tullow Oil PLC is a well-established oil & gas exploration, and production company focused on exploring oil resources in Africa and South America. Moreover, the Company’s portfolio includes 70 licenses over 15 countries with 243 million barrels of oil equivalent as of 31 December 2019.
(Source: Company presentation)
Recent News
On 09 March 2021, it is updated that Tullow Oil will replace Calisen in FTSE 250 Index with effect from 12 March 2021.
On 09 February 2021, TLW had signed the sale and purchase agreement with Panoro Energy ASA regarding the disposal of assets in Equatorial Guinea (‘EG”) and Dussafu Assets. The total consideration of this transaction would be USD 180 million, of which USD 105 million is related to the EG transaction, and Dussafu assets accounted for USD 70 million. Both transactions are expected to be completed by the first half of 2021.
FY20 Financial Review (for 12 months ended 31 December 2020, as of 10 March 2021)
(Source: Company result)
- The working interest production volume had declined from 86,800 boepd (Barrels of Oil Equivalent Per Day) during FY19 to 74,900 boepd for FY20 due to field decline and water cut in Ghana.
- Moreover, the realized oil prices had slipped from USD 62.4 per barrel during FY19 to USD 50.9 per barrel for FY20 due to adverse oil price movement caused by the Covid-19 pandemic.
- Furthermore, reduced volumes and lower oil prices had resulted in lower revenue of USD 1,396 million during FY20, while it was USD 1,683 million for FY19.
- TLW had incurred decommissioning expenditure of USD 58 million and capital expenditure of USD 288 million during FY20.
- TLW had narrowed down its loss after tax to negative USD 1,222 million during FY20 as compared to negative USD 1,694 million for FY19.
- The underlying operating cash flow was USD 598 million during FY20.
- On the leverage front, the Company had maintained a gearing of 3.0x during FY20. Moreover, TLW had a net debt of USD 2.4 billion as of 31 December 2020.
- TLW had completed the disposal of Uganda assets worth USD 575 million during November 2020.
- Standard & Poor had put TLW into CCC+ corporate credit rating and corporate bond rating on 5 February 2021.
- Overall, TLW had delivered a resilient business performance in Ghana during 2020.
Share Price Performance Analysis of Tullow Oil PLC
(Source: EODHD/Others, chart created by Kalkine group)
TLW’s shares were trading at GBX 53.02 and were up by close to 2.04% against the previous closing price as of 10 March 2021 (before the market close at 09:12 AM GMT). TLW's 52-week Low and High were GBX 7.17 and GBX 57.32, respectively. Tullow Oil PLC had a market capitalization of around £732.97 million.
Business Outlook
The Company had estimated working interest oil production to fall between 60,000 bopd (Barrels of Oil Per Day) and 66,000 bopd for FY21. Moreover, TLW has a long-term objective to become a Net Zero Company by 2030. Furthermore, TLW anticipated pre-financing cash flow to be around USD 0.2 billion during FY21 at oil price of USD 50 per barrel, and each USD 10 per barrel increase in oil price would bring additional pre-financing cash flow worth USD 100 million. The drilling program, including four well in Ghana, is expected to start during April 2021. TLW had projected a capex of USD 265 million and decommissioning expenditure of USD 100 million during 2021. Meanwhile, the results of the Suriname exploration well would be expected by early Q2 FY21. Overall, the Company is well-positioned to accelerate its growth trajectory underpinned by the strong oil prices.
(Source: Company presentation)
