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Tullow Oil share price outlook and interim results preview

‘Tullow now has a strong financial footing and we are making very good progress in delivering on our highly cash generative business plan and continuing to reduce our debt.’

When will Tullow Oil report its next results?

Tullow Oil (LSE: TLW), the UK-listed multinational oil and gas exploration company is set to report its latest set of interim results on 15 September 2021.

Tullow oil share price: 2021 snapshot

For shareholders, 2021 has been a constructive year, with the Tullow Oil share price rising 45.95% since January 1.

This comes as oil prices have rebounded firmly over the last nine months – with both Brent and WTI, at the time of writing, trading confidently above the US$70 per barrel mark. That’s a stark contrast to 2020, which saw oil turn negative for the first time in its history.

Despite trading well off the low set in March 2020, at Tullow's last traded price of 42.02p per share, the stock remains well off its 5-year high.

The analyst outlook

Despite investors piling into the stock in 2021, the sell-side remains mixed on Tullow, with the stock commanding a consensus price target of 34.50p per share, according to MarketBeat, implying downside potential from current levels. That view is made up of 2 Hold ratings and 2 Sell ratings.

Sell-side coverage has dried up on Tullow over the last year: one year ago the stock, while still commanding a Hold rating, boasted a consensus made up of 4 Buy recommendations, 9 Hold recommendations, and 2 Sell recommendations. The consensus price target also stood at a more bullish 58.36p.

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*Based on revenue excluding FX (published financial statements, June 2020)

July trading statement revisited

While the oil and gas exploration company is yet to release its official interim results, a trading statement released on 14 July by the company provides colour to how those results may play out.

For one, the company provided 1H FY21 oil production figures, noting that total oil production averaged 61.2 thousand barrels of oil per day, during the first-half of fiscal 2021. The company also provided updated full-year, FY21 oil production guidance, saying it expected to produce between 55-61 thousand barrels of oil per day.

Commenting on that trading statement – Tullow CEO – Rahul Dhir, said:

‘I am pleased to report that Tullow has made excellent operational and financial progress in the first half of 2021. Our producing fields in West Africa are performing well and we have successfully started our drilling programme in Ghana.’

‘Tullow now has a strong financial footing and we are making very good progress in delivering on our highly cash generative business plan and continuing to reduce our debt,’ Mr Dhir continued.

Elsewhere, management said they expected H1 revenue to come in at ~US$700 million, while H1 operating cashflow was guided to come in at ~US$200 million.

The company also provided some other key full-year guidance revisions as part of that July release, which included the following highlights:

  • Full-year CAPEX is expected to come in at US$250 million, lower than previously guided
  • Full-year operating cashflow is expected to reach ~US$600 million, assuming oil prices remain at US$60 per barrel across the rest of FY21
  • Full-year cash financing costs are expected to hit US$290 million

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