Tullow Oil share price extends rebound off 10-year low

Tullow Oil Plc (LON:TLW) shares continued climbing in today’s session, following a six percent surge on Tuesday, as investors latched on to positive analyst comments and took advantage of a 10-year share price low.

Financial and banking advisory Macquarie said yesterday that lenders remain supportive of larger oil and gas exploration companies.

According to the Financial Times, the broker argued that while Tullow may have to issue equity to fund its exploration plans, the Africa-focused firm is unlikely to be forced into an unfavourable solvency scenario.

Earlier this month, Investec said that Tullow would need to raise some $750 million (£486 million) in addition to exiting East Africa, in order to stay afloat.

“We see recapitalisation followed by an asset sale as the only way to correct Tullow’s flagging investment case,” Investec oil and gas analyst Brian Gallagher said.
In contrast, Macquarie argued that lenders will offer the Ireland-based firm a “soft landing” when loan book forecasts are rebased next month, noting that only two of Tullow’s 27 creditors are under pressure to pull back on energy exposure.

Meanwhile, reports surfaced over the weekend that Bharat Petroleum is in talks to buy a 10 percent stake in Tullow’s South Lokichar Basin in Kenya.

Tullow’s share price had surged 3.36 percent to 172.20p as of 12:21 BST today, outperforming the FTSE 100 which was up by about 2.4 percent. The company’s stock dipped to a 10-year low of 153.50p on Monday, while year-to-date, shares have lost nearly 60 percent.

As of 12:41 BST, Wednesday, 30 September, Tullow Oil plc share price is 172.05p.