Tullow Oil (TLW) sees rise following South American oil discovery

With the group’s high flying days a somewhat distant memory, could this discovery be a return to form?

Article updated: 12 August 2019 12:00pm Author: Graham Spooner

  • Jethro-1” exploration well in Guyana has resulted in a “substantial and high value” oil discovery.
  • Despite a comparatively high debt level the group has resumed paying a dividend, signalling to some investors the worst is behind them.
  • We continue to view the shares as a ‘buy’ for investors willing to accept a high level of risk.

Investors with a long memory will remember the days when Tullow Oil was a high flyer in the sector and appeared to find oil with relative ease. Yet for many these days will be a distant memory and the share price has reflected on a rather barren period. So today’s announcement that the group has discovered a significant oil strike off the coast of Guyana has led to early excitement and a 17% rise in the share price.

The group still has a relatively high debt level, although the fact the group has resumed paying a dividend may signal to some investors that the worst is behind them and of course they will be highly geared to volatile oil prices.

Our view on Tullow Oil - Buy

We continue to view the company as a high risk ‘buy’ for investors looking for capital growth and in the hope there could be more good news to come.

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All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Graham Spooner portrait photo
Graham Spooner

Investment Research Analyst

Graham started out as a fully authorised dealer on the Stock Exchange trading floor and for various banks, before becoming an FSA-approved investment adviser. Now a respected voice in the media, Graham’s share tips and comments on the markets are frequently sought by the national press.