Insights Into Tullow Oil Share Price

Tullow Oil PLC is an independent oil and gas exploration and production company founded in Tullow, Ireland 1985. Since then, it has grown to operate over 100 licenses across 15 countries, producing around 80,000 barrels of oil per day.

In this article, we’ll provide some background on Tullow Oil and look at factors impacting its share price. We’ll find out who the current CEO is, determine if the company is a major player in the oil industry, and the Tullow oil share price in 2023. 

Who is the CEO of Tullow Oil?

The current Chief Executive Officer of Tullow Oil is Rahul Dhir, appointed in July 2020. Dhir has over 35 years of experience in the oil and gas industry, having previously worked for Shell, Cairn India, and Delonex Energy. He took over the company’s leadership during a turbulent period when the Tullow oil share price crashed due to drilling disappointments and heavy debt burdens.

Since joining Tullow, Dhir has been focused on reducing debt, driving operational efficiency, and maintaining strict capital discipline to rebuild investor confidence. He has overseen significant reductions in administrative costs and financings to provide financial flexibility.

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Is Tullow Oil a Big Company?

Tullow Oil is not particularly large in the context of publicly traded oil exploration and production companies. As of December 2023, its market capitalization is around $609 million, based on the report of YCharts, a platform giving financial insights. 

To put that into perspective, other mid-cap oil and gas companies include Kosmos Energy ($3 billion market cap), Serica Energy ($1.3 billion), and Genel Energy ($630 million). By comparison, integrated supermajors like Shell and BP have over $200 billion in market valuations.

So, while Tullow Oil operates substantial oil production assets globally, its smaller size limits its financial firepower. This can restrict its ability to invest in major capital projects compared to oil giants.

However, it makes up for what Tullow lacks in scale through its focus and expertise. The company specializes in finding and operating resources in Africa and South America. Its core operations are in West Africa, offshore Ghana, Equatorial Guinea, Gabon, and Suriname in South America.

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Tullow Oil Share Price in 2023

In 2023, the Tullow Oil share price demonstrated volatility amidst an uncertain macro backdrop. The stock has traded between 28p and 36p over the past seven months. Tullow’s share price ticked up in early 2023, hitting 35p in February and again in August. This reflected optimism around the company’s ongoing turnaround efforts, debt reduction progress, and strong oil prices.

By mid-year, the Tullow oil share price came under pressure in line with declining oil prices and concerns over global recession risks. This saw the stock fall back to 28p by June before recovering to trade around 34p for the next few months.

Recent underlying oil price volatility was reflected in Tullow’s see-sawing share price over the past quarter. A dip to 33p in October followed a brief jump to 36p in early November when oil rebounded.

But prices eased again amid demand uncertainty leading into winter, putting downward pressure on Tullow’s equity value. So far, December has seen the stock drift lower to close at 33.4p – back towards the lower end of its 2023 trading range.

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Reasons for Declining Tullow Oil Share Price

While Tullow Oil shows recent signs of progress in getting back on track, its share price remains well below past highs. A few key factors have contributed to the equity decline from its peak.

Oil Value Declines

The drop in global crude oil prices since 2014 has negatively impacted profits and share prices across the wider oil and gas industry. 

Tullow Oil heavily depends on oil production for the bulk of its revenue. So, multiple years of depressed prices have reduced cash flows available to service debts and fund further investment. This backdrop has weighed heavily on the Tullow Oil share price value.

Production Problems

The company has also faced significant production challenges in Ghana’s two main producing oil fields – the Jubilee and TEN fields. Technical issues, including production equipment failures and delays, have affected output over recent years.

This led Tullow to reduce its 2020 production forecasts, creating uncertainty around whether it could meet its revised targets. Ongoing production uncertainty and delays in fixing problems impacted operating cash flows, again putting downward pressure on the Tullow oil share price.

High Debt Levels

Managing debt burdens has proved an ongoing struggle for Tullow. The company had accumulated borrowings during low oil prices and resultant losses.

Attempts to sell down interests in Ugandan oil fields to raise cash had disappointing results. Only $575m was raised from the sale, far short of initial expectations of up to $1.5 billion. This has left lingering concerns about Tullow’s ability to reduce debts meaningfully to more manageable levels.

The combination of high debts and lower oil revenues raised fears amongst investors about ongoing borrowing costs and debt servicing issues. This was reflected in the decline of Tullow oil share price. 

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In Essence

Tullow Oil’s share price has experienced significant ups and downs over the last few years. While the company has shown encouraging progress under new leadership and improving oil markets, there remain risks around debt burdens, production reliability, and exposure to oil price volatility. 

Investors should conduct further research and analysis on these issues to determine if Tullow Oil aligns with their risk tolerance and portfolio strategy before trading the stock. In particular, closely monitor oil prices, production levels, debt refinancing deals, and progress on significant projects. 

Consider diversifying across other stocks and sectors to manage risks—Approach Tullow Oil as a higher-risk, higher-potential reward investment suited to experienced traders. Regardless, we encourage readers to thoroughly research all factors affecting Tullow’s operational and financial performance to make informed trading decisions.

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