Tullow Oil’s share price rises after FY results. This is what I’d do now

first_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. See all posts by Royston Wild Enter Your Email Address Simply click below to discover how you can take advantage of this. “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Our 6 ‘Best Buys Now’ Shares Tullow Oil’s share price rises after FY results. This is what I’d do nowcenter_img Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Image source: Getty Images. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. UK share markets are trading fractionally lower on Wednesday. But the Tullow Oil (LSE: TLW) share price isn’t suffering from weak investor appetite in midweek trade. Indeed, its share price is up 2% at 53.2p after the oilie released full-year results for 2020.Tullow hit 54.6p per share earlier today to reach levels not seen for almost 14 months. The oil giant has now more than doubled in value in just six weeks. But can Tullow Oil keep the run going? And should I buy the UK share for my Stocks and Shares ISA?5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Revenues and profits slumpUnsurprisingly, Tullow Oil saw both revenues and profits plummet in 2020 as Covid-19 lockdowns and travel restrictions smashed oil demand. Turnover tanked 17% year-on-year to $1.4bn as the price Tullow got for its product slipped. The average price of its oil slipped to $50.90 per barrel versus $62.40 a barrel in 2019.Tullow Oil also saw production fall sharply in 2020. The black gold producer saw its working interest drop 12% year-on-year in 2020 to 74,900 barrels, it said. This decline reflected field cuts and water declines in Tullow’s key producing market of Ghana, it said, as well as production cuts at its Gabon operations as per OPEC+ requirements.In Ghana, combined production from its TEN and Jubilee assets slipped around 10m barrels year-on-year to 52.4m barrels.This fresh revenues slump meant annual gross profit at Tullow dropped 47% in 2020 to $403m.However, it wasn’t all bad news for the UK oil share last year. Net debt dropped by a chunky $430m year-on-year to stand at $2.38bn, helped by the recent sale of assets in Uganda. Meanwhile, free cash flow at the business improved to $432m, from $355m in 2019.Should I buy Tullow Oil shares?Tullow Oil said it expects group production to fall again in 2021, to between 60,000 and 66,000 barrels. This figure will be adjusted according to completed asset sales in Equatorial Guinea and Gabon, it added.But Tullow Oil struck a more upbeat tone beyond this year. It said that “investment focused on [our] cash generative producing assets in West Africa is expected to increase production in 2022 and sustain it for the longer term.”Investor appetite for Tullow Oil’s shares continues to strengthen. But I won’t buy the UK fossil fuel share for my own shares portfolio. The business of searching for and then producing crude is naturally packed with risk. But this isn’t all that’s discouraging me.I’m worried that mountains of fresh supply are about to come online at the same time as the rise of green energy casts a shadow over future demand. This threatens to hit Tullow Oil’s revenues hard.On the plus side, Tullow’s balance sheet is in much ruder health than it has been. And its plan to focus on low-cost and higher-cash-producing assets in West Africa over the next decade could produce handsome shareholder returns beyond 2021. But it’s still a risk too far for me. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Royston Wild | Wednesday, 10th March, 2021 | More on: TLW last_img

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