Tullow (TUWOY) Meets Mid-Year Outlook, Upholds Annual Guidance

U.K.-based, West Africa-focused Tullow Oil Plc TUWOY kept its annual production guidance untouched after what the company called a robust first-half performance that met its expectations. Meanwhile, the company continues to move ahead with its agreed merger with its rival, Capricorn Energy PLC, which will lead to the creation of an Africa-focused energy firm with a market value of more than £1.4 billion.

With lower oil prices last year, Tullow had free cash flow of roughly $245 million, augmented by the sale of its assets in Uganda.

During the first half of 2022, TUWOY recorded a gross output of 82,400 barrels of oil per day (bbl/d) at its Jubilee field and 24,300 bbl/d at its TEN fields, both located in offshore Ghana. Net production stood at roughly 30,800 and 12,500 bbl/d, respectively. The Simba field in Gabon had an output of 6,000 bbl/d, while the Espoir field in Ivory Coast produced 2,100 bbl/d. The firm created revenues of $800 million during the period taking the cost of hedging into account.

Tullow kept its annual production guidance in the range of 59,000-65,000 barrels of oil equivalent per day. Per Tullow, it has hedged 42,500 barrels per day in 2022 at an average floor and call price of $51 and $78 a barrel, 33,100 bbl/d in 2023 and 11,300 bbl/d in 2024 at $55 and $75 a barrel, respectively.

Moreover, TUWOY also maintained its free cash flow guidance of $200 million this year, anticipating an average oil price of $95 per barrel of oil.

Tullow Oil operates as an independent oil and gas exploration and production company in Europe. The company has a large portfolio of exploration and production assets, with a focus on balanced long-term growth. It is headquartered in London, the United Kingdom.

Tullow currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the energy space that warrant a look include Vermilion Energy VET, Valero Energy VLO and Marathon Petroleum MPC, each sporting a Zacks Rank #1 (Strong Buy).

The Zacks Consensus Estimate for Vermilion's 2022 earnings stands at $7.17 per share, which is an increase of approximately 184.5% from the year-ago earnings of $2.52.

The Zacks Consensus Estimate for VET's 2022 earnings per share has been revised from $6.66 to $7.17, up about 7.6%, in the past 60 days.

The Zacks Consensus Estimate for Valero's 2022 earnings is pegged at $20.03 per share, up about 612.8% from the year-ago earnings of $2.81.

VLO beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 84.3%.

Marathon Petroleum beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 65%.

The Zacks Consensus Estimate for MPC's 2022 earnings stands at $16.10 per share, up approximately 557.1% from the year-ago earnings of $2.45.
 
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