More on Tullow Oil
Tullow Oil: Results for 2004
Tullow Oil announced record results for the year to December 2004. Turnover grew 74% to £225.3m and operating profits grew 88% to £83.2m. Higher levels of output (production grew 62% to 40,600 boepd) and better oil prices were responsible for the improved results which have been explained in more detail in our recent update on Tullow’s trading statement.
The company says 2005 will “be a year of consolidation and delivery from Tullow’s enlarged portfolio of assets” which seems to rule out further acquisitions for the moment but output will still grow significantly as the company will benefit from having a full years production from Energy Africa (acquired on 28th May 2004 and contributing to only seven months of production last year). Tullow says current production levels are above 56,000 boepd, 38% ahead of last year.
The outlook for oil prices in the medium term is still good and the company should report good growth. The stock trades at 190p, on prospective PE (on 2005 earnings) of 20x which is at the top of the sector range and already factors in much of the growth. The yield is negligible.
Random picks: Arriva | BP | Lonmin | Marshalls | Morgan Crucible | PZ Cussons | P & O | Randgold | Wolverhampton & Dudley Breweries | Capita