Tullow - comment

It was announced yesterday that Tullow will enter the FTSE 250 later this month. This will broaden the shareholding base and some investors will have to buy to track the index. More importantly, is the impact on oil prices from the Russian/Ukrainian conflict. Tullow has hedged 2/3rd of its production (pre the preemption portion of the Ghanian fields, which hasn’t settled yet) with put call spreads, with the calls sold at $77/bbl. We expect they will announce next week at the release of their FY21 numbers an increase to their FY23 hedging which is currently 50% hedged with a sold call at 74/bbl. Kosmos’ FY21 call earlier this week just confirmed operational data for their Ghanian fields in line with Tullow’s January trading statement. The focus of Tullow’s numbers on the 9th March will be on future CAPEX and specifically, number of wells drilled at both TEN and Jubilee fields.