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Tullow (TUWOY) Gives Revised 2021 Capex & Production Guidance

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Tullow Oil plc (TUWOY - Free Report) announced that its production guidance for 2021 has been revised to 55,000-61,000 barrels of oil per day (bopd), marking a decline from 60,000-66,000 bopd mentioned earlier. The production guidance was reduced due to the sale of the Equatorial Guinea assets and the Dussafu Marin permit in Gabon.

The company’s capital expenditure for 2021 is expected to be $250 million, down from the previously stated $265 million. It expects an operating cash flow of $600 million for the year, unchanged from 2020. The company expects an increase in operating cash flow of $50 million if oil price averages $70 a barrel for the remaining year.

Tullow also provided preliminary production results and operational updates for the first half of 2021. The company’s Ghana performance exceeded its expectations due to the increased production on the Jubilee and TEN fields.

In the first half of 2021, Jubilee gross production averaged 70,600 bopd, while the same on TEN oilfield averaged 37,000 bopd. With new wells coming online, average production from Jubilee is expected to increase in the second half of 2021. In the first half of 2021, Tullow’s net production from the non-operated portfolio was 18,800 bopd, in line with expectations.

Revenues are expected to be $700 million, with a realized oil price of $58 per barrel, including hedge costs of $50 million. In second-quarter 2021, net debt is expected to be $2.3 billion, and liquidity headroom and free cash are expected to be $700 million. Notably, capital expenditure in the first half of 2021 was $100 million.

Tullow had strong operational and financial progress in the first half of 2021. The company has a strong financial position and is making headway in delivering on its highly cash-generative business plan and reducing debt.

Company Profile & Price Performance

Headquartered in London, UK, Tullow is a hydrocarbon explorer and producer, with the main focus on Africa.

Shares of the company have outperformed the industry in the past six months. Its stock has gained 33.8% compared with the industry’s 1.7% growth.


Zacks Investment Research
Image Source: Zacks Investment Research


Zacks Rank & Stocks to Consider

The company currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are ConocoPhillips (COP - Free Report) and EOG Resources, Inc. (EOG - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy), and Pioneer Natural Resources Company (PXD - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, the Zacks Consensus Estimate for ConocoPhillips’ 2021 earnings has been raised by 22.5%.

EOG Resources’ earnings for 2021 are expected to rise 9.8% year over year.

Pioneer’s earnings for 2021 are expected to increase 50.1% year over year.