Tullow Oil Share Price Forecast July 2021 – Time to Buy TLW?
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Shares of multinational oil and gas exploration company Tullow Oil (LSE: TLW) are in the red in the live market (July 27 13:30 UTC+1) after the company expressed its concern about lower FY21 production. It makes investors wonder if it is the right time to pick TLW shares.
Tullow Oil – Technical Analysis
The financial statement of Tullow Oil reveals that the company has a market cap of £661.329M while total assets are worth £4.797B. The revenue of the company was £918.15M in 2020 compared to £1.36B in 2019. The market is open at the moment of writing at £47.44 with a downtrend of -2.32%.
According to the technical information of TLW, Moving Averages such as Exponential Moving Average (20)(50.27), Simple Moving Average (20)(51.63), Volume Weighted Moving Average (20)(51.49), and Simple Moving Average (30)(55.08) are pointing towards a sell action. Oscillators like Stochastic RSI Fast (3, 3, 14, 14)(78.63), Williams Percent Range (14)(-62.12), and Bull Bear Power (-1.49) are being neutral, while MACD Level (12, 26) is pointing towards a sell action.
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Recent Developments
Established in 1985 in the United Kingdom by Aidan Joseph Heavey and headquartered in London, Tullow Oil plays a role in the exploration, production, and development of oil and gas. It functions through East Africa, West Africa, and new ventures. Apart from a primary listing on the London Stock Exchange, the company is also a constituent of the FTSE 250 Index.
As a part of the business plan, Tullow Oil stated on June 16 that it was going to increase the volume of oil protected by it by hedging to 75% of the company’s output during the next couple of years. The company also has plans for an additional 50% increase for a year more. The company is also focused on cutting debts by reducing capital allocation to long-term projects. It has raised more than $700M through sales of interests in Equatorial Guinea, Uganda, and Dassafu Marin permit in Gabon.
On July 7, TechnipFMC reported that it secured a contract with Tullow Oil, valuing between $75M and $250M, for the Jubilee South East Development Project of Tullow Oil in offshore Ghana. Under the contract, TechnipFMC is going to provide and install all major subsea equipment required for the project, including flexible risers and flowlines, manifolds and associated controls, umbilicals and subsea structures. Right after this contract, TLW shares declined by over 4%.
As mentioned earlier, the company is expecting a fall in its full-year oil production of 2021, and it is also downgrading its estimates because of recent asset sales. Initially, the forecast for oil per day was 60,000 barrels to 66,000 barrels, but now it is only expecting 55,000 barrels to 61,000 barrels. Moreover, Tullow Oil is also expecting a full-year operating cash flow of $600M as it assumes $60/bbl for the rest of 2021. The company also has to make a decision about investing in the Lake Albert Development in Uganda. This investment will warrant a total of $75M payment.
Should You Buy TLW Shares?
From an investor’s point of view, it is important to consider the risk-reward ratio of a share before investing in it. MRO shares have been dropping during the last month, and only a slight price rise has been noticed recently. The technical information offers more insight. All Moving Averages are pointing towards selling, while Oscillators are either neutral or pointing towards selling as well. So, it may not be the right time to invest in TLW shares.
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