Tullow Oil share price: what’s the latest as the stock falls 10%?
The UK-based oil and gas explorer continues to see its shares tumble in December, with its share price falling more than 10% on Monday, compounding losses sustained a week prior.
Tullow Oil continues to see its fortunes go from bad to worse in December, with the company seeing its share price fall by more than 10% on Monday to close at 60p a share.
The oil and gas explorer’s latest decline comes just a week after the company saw its share price fall by more than 70% - wiping over £1 billion off its market value.
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Tullow Oil shares tumble after CEO quits
The latest share price decline that Tullow Oil suffered came after its CEO Pat McDade announced his resignation, with the company’s exploration director Angus McCoss also stepping down.
The decision by both senior members of the firm came after the company was forced to cut its production guidance earlier this year.
Full-year 2019 oil production is forecast to average around 87,000 barrels of oil per day. This is slightly below previous guidance primarily due to weaker-than-expected production performance at its operations in Ghana, with drilling suspended at its TEN fields site in July.
Not only did the company have to downgrade its full-year production guidance, but Tullow Oil also announced that recent discoveries in Guyana contained low quality, heavy, sour oil which have significantly less commercial value.
The oil and gas company remains optimistic about the larger basin in Guyana and its potential to become a driver of profit and source of future cash flows, but even if the site does eventually bear fruit it will take some time for new wells to come online.
Analysts downgrade outlook for Tullow Oil share price
Analysts at HSBC and RBC both downgraded the stock in December.
HSBC offered the bleakest outlook for Tullow Oil, with its analysts offering a target price of 50p, representing a potential downside for the stock of -16.6%.
RBC, however, still believes the oil and gas explorer can claw back some of the gains its lost, issuing a target price of 100p, representing a potential upside of 66.6%.
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