Tullow Oil reassures market

Tullow Oil has reassured the market that it has plans in place to cover loss of production and revenue from Jubilee field in Ghana, as Graham Spooner, investment research analyst at The Share Centre, explains

Tullow Oil reassures market

In an update reported this morning, Tullow Oil said that it expects earnings in the first half to be lower, as a result of fall in output, in particular from the Jubilee Field in Ghana.

The oil and natural gas exploration group, whose main operations are in East and West Africa, also revised West African oil production guidance range down to 62–68,000 bopd, a move expected by analysts. The company did however reassure the market that it has plans in place to cover loss of production and revenue.

It was not all doom and gloom as the FTSE 250 company stated that its TEN project will start pumping oil within six weeks. The group was also quick to add that the project had been on schedule and within budget since it started in 2013, with chief executive Aidan Heavey describing it as ‘transformational’.

Furthermore, interested investors should appreciate that production in June has now been stabilised at around 90,000 barrels per day at the Jubilee field .

We would advise investors that it remains a higher risk geared play on the oil price, especially as concerns remain over its relatively large debt levels.

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