These full-year results from Tullow Oil (TLW) demonstrate the strong progress the frontier oil explorer is making on almost every front: production is rising, exploration work is yielding major new discoveries, the balance sheet is more secure than ever and revenues and operating profits are up. Yet this is nothing more than the market expects of Tullow and indeed the company's share price drifted down throughout 2012. We don't expect a significant reversal anytime soon, either, given that the shares still trade at a hefty premium to peers.
Group net production rose by a sliver to 79,200 barrels of oil-equivalent per day (boepd) from 78,200 boepd in 2011, which was slightly below guidance because of the enforced shutdown of non-operated gas production in the UK following a third-party safety incident. But, importantly, the company's flagship Jubilee field offshore Ghana is now producing around 110,000 barrels of oil per day (bopd) gross, up from an average of just 66,000 bopd in 2011 following a cost-effective remediation program last year. Tullow expects the field to finally reach its plateau production rate of 120,000 bopd by year-end 2013. Overall, group net production is forecast to be in the range of 86,000 to 92,000 boepd this year.
Barclays estimates EPS of 78¢ in 2013, up from 68.8¢ in 2012.
TULLOW OIL (TLW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,234p | MARKET VALUE: | £11.2bn | |
| TOUCH: | 1233-1235p | 12-MONTH HIGH: | 1,611p | LOW: 1098p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 576¢* | NET DEBT: | 19% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($bn) | Earnings per share (p) | Dividend per share (p) |
| 2008 | 692 | 299 | 30.9 | 6.0 |
| ($bn) | ($bn) | (¢) | (p) | |
| 2009 | 0.92 | 0.33 | 3.2 | 6.0 |
| 2010 | 1.09 | 0.18 | 8.1 | 6.0 |
| 2011 | 2.30 | 1.07 | 72.5 | 12.0 |
| 2012 | 2.34 | 1.12 | 68.8 | 12.0 |
| % change | +2 | +5 | -5 | - |
Ex-div: 17 Apr Payment: 16 May *Includes intangible assets of $3.0bn, or 328¢ a share £1=$1.57 | ||||
