Tullow Oil shares up after RBC Capital Markets upgrades to outperform
RBC Capital Markets has upgraded Tullow Oil from ‘sector perform’ to ‘outperform', but has cut its target price from 400p to 260p due to low oil prices.
FTSE 250
20,508.75
15:45 15/11/24
FTSE 350
4,453.56
15:45 15/11/24
FTSE All-Share
4,411.85
15:45 15/11/24
Oil & Gas Producers
8,043.72
15:45 15/11/24
Tullow Oil
22.10p
15:39 15/11/24
In a note sent on Monday, it said despite oil prices dropping to new lows, the company can push on.
“In H1/16 we expect Tullow to extend its asset-backed debt facilities, and this should enable investors to refocus on the potential of those assets.”
It said while three months is a long-term outlook in the current oil market, Tullow’s $3.7bn Reserve Based Lend is underpinned by its probable and proven reserves.
It was also positive about the company’s outlook.
“At 156p, a Brent oil price of ~$37/bbl and an EV/boe $5/boe 2P+2C, the risks are, we believe, to the upside.
“Looking ahead, we think $60/bbl oil could be a key resistance point for a recovering oil price.”
The market reacted positively to the note, with shares up 5.5p (3.55%) to 160.6p at 1133 GMT.