Tullow Oil share price: Barclays reinstates overweight rating on group

Tullow Oil share price: Barclays reinstates overweight rating on group

Barclays has reinstated its ‘overweight’ rating on Tullow Oil (LON:TLW). The move comes as the Africa-focused oil explorer nears completion of the two-year restructuring of its debt, costs and portfolio.

Tullow Oil’s share price lost 0.23 percent to close at 170.60p yesterday, underperforming the mid-cap FTSE 250 index which ended the session 0.21 percent higher at 19,695.92 points. The group’s shares have lost more than a fifth of their value over the past year, and are down by some 45 percent in the year-to-date.
Barclays reinstated its ‘overweight’ rating on Tullow Oil yesterday, with a price target of 220p on the shares, noting that a debt refinancing was the last item outstanding on the group’s corporate re-set, following a recent $750-million rights issue.

“This journey has required many difficult decisions, but we believe the end result is a balanced E&P business with a portfolio that can grow and remain self-sufficient in a $50/bbl oil environment,” the analysts pointed out, as quoted by Sharecast, adding that they saw the Africa-focused group as offering investors “exposure to rising low-cost oil production” from the Jubilee and TEN fields offshore Ghana which are generating free cash flow, with a further phase of medium-term growth coming from Uganda and Kenya.

“The possibility of asset sales in 2018 can accelerate the company’s deleveraging plans and fund a return to the company’s traditional strengths as a frontier explorer,” Barclays concluded.
As of June 7, 2017, the consensus forecast amongst 25 polled investment analysts covering Tullow Oil for the Financial Times advises investors to hold their position in the company. According to MarketBeat, the Africa-focused oil explorer currently has a consensus ‘hold’ rating and an average price target of 248.26p.
As of 07:48 BST, Thursday, 08 June, Tullow Oil plc share price is 178.90p.

By Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.
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