LSE:TLW

Stock Analysis Report

Executive Summary

Tullow Oil plc engages in the oil and gas exploration, development, and production activities primarily in Africa and South America.

Rewards

Trading at 58.2% below its fair value

Earnings are forecast to grow 4.86% per year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Highly volatile share price over past 3 months

Large one-off items impacting financial results

+ 2 more risks


Snowflake Analysis

Undervalued average dividend payer.


Similar Companies

Share Price & News

How has Tullow Oil's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TLW's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-65.7%

TLW

1.0%

GB Oil and Gas

0.9%

GB Market


1 Year Return

-75.4%

TLW

0.7%

GB Oil and Gas

8.7%

GB Market

Return vs Industry: TLW underperformed the UK Oil and Gas industry which returned 0.7% over the past year.

Return vs Market: TLW underperformed the UK Market which returned 8.7% over the past year.


Shareholder returns

TLWIndustryMarket
7 Day-65.7%1.0%0.9%
30 Day-78.1%-6.6%-0.5%
90 Day-80.0%-2.8%0.9%
1 Year-74.9%-75.4%5.9%0.7%14.3%8.7%
3 Year-82.8%-85.7%20.7%5.3%18.8%3.6%
5 Year-85.6%-88.0%69.5%36.7%42.6%9.9%

Price Volatility Vs. Market

How volatile is Tullow Oil's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Tullow Oil undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TLW (£0.46) is trading below our estimate of fair value (£1.09)

Significantly Below Fair Value: TLW is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TLW is good value based on its PE Ratio (6.3x) compared to the Oil and Gas industry average (6.8x).

PE vs Market: TLW is good value based on its PE Ratio (6.3x) compared to the UK market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: TLW is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: TLW is good value based on its PB Ratio (0.3x) compared to the GB Oil and Gas industry average (0.8x).


Next Steps

Future Growth

How is Tullow Oil forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

4.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TLW's forecast earnings growth (4.9% per year) is above the savings rate (0.5%).

Earnings vs Market: TLW's earnings (4.9% per year) are forecast to grow slower than the UK market (12.4% per year).

High Growth Earnings: TLW's earnings are forecast to grow, but not significantly.

Revenue vs Market: TLW's revenue is expected to decline over the next 3 years (-3.2% per year).

High Growth Revenue: TLW's revenue is forecast to decline over the next 3 years (-3.2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TLW's Return on Equity is forecast to be low in 3 years time (7.3%).


Next Steps

Past Performance

How has Tullow Oil performed over the past 5 years?

44.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TLW has a large one-off gain of $156.5M impacting its June 30 2019 financial results.

Growing Profit Margin: TLW's current net profit margins (7.3%) are lower than last year (12.2%).


Past Earnings Growth Analysis

Earnings Trend: TLW has become profitable over the past 5 years, growing earnings by 44.1% per year.

Accelerating Growth: TLW's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TLW had negative earnings growth (-40.5%) over the past year, making it difficult to compare to the Oil and Gas industry average (24.7%).


Return on Equity

High ROE: TLW's Return on Equity (4.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Tullow Oil's financial position?


Financial Position Analysis

Short Term Liabilities: TLW's short term assets ($2.8B) exceed its short term liabilities ($1.6B).

Long Term Liabilities: TLW's short term assets ($2.8B) do not cover its long term liabilities ($6.4B).


Debt to Equity History and Analysis

Debt Level: TLW's debt to equity ratio (116.9%) is considered high.

Reducing Debt: TLW's debt to equity ratio has increased from 59.5% to 116.9% over the past 5 years.

Debt Coverage: TLW's debt is well covered by operating cash flow (31.7%).

Interest Coverage: TLW's interest payments on its debt are not well covered by EBIT (1.9x coverage).


Balance Sheet

Inventory Level: TLW has a high level of physical assets or inventory.

Debt Coverage by Assets: TLW's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Tullow Oil's current dividend yield, its reliability and sustainability?

7.98%

Current Dividend Yield


Dividend Yield vs Market

company8.0%marketbottom25%2.0%markettop25%5.2%industryaverage5.5%forecastin3Years9.8%

Current dividend yield vs market & industry

Notable Dividend: TLW's dividend (7.98%) is higher than the bottom 25% of dividend payers in the UK market (1.95%).

High Dividend: TLW's dividend (7.98%) is in the top 25% of dividend payers in the UK market (5.19%)


Stability and Growth of Payments

Stable Dividend: TLW's dividend payments have been volatile in the past 10 years.

Growing Dividend: TLW's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (50%), TLW's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TLW's dividends in 3 years are forecast to be well covered by earnings (33.8% payout ratio).


Next Steps

Management

What is the CEO of Tullow Oil's salary, the management and board of directors tenure and is there insider trading?

2.9yrs

Average management tenure


CEO

Paul McDade (56yo)

2.7yrs

Tenure

US$2,759,684

Compensation

Mr. Paul McDade has been the Chief Executive Officer of Tullow Oil Plc since April 26, 2017 and as its Executive Director since March 29, 2006. Mr. McDade served as the Chief Operating Officer of Tullow Oi ...


CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD3.64M) is above average for companies of similar size in the UK market ($USD1.17M).

Compensation vs Earnings: Paul's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

2.9yrs

Average Tenure

57yo

Average Age

Experienced Management: TLW's management team is considered experienced (2.9 years average tenure).


Board Age and Tenure

2.6yrs

Average Tenure

57yo

Average Age

Experienced Board: TLW's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: TLW insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$28,20022 Nov 19
Jeremy Wilson
EntityIndividual
Role
Lead Director
Senior Independent Director
Shares20,000
Max PriceUS$1.41
BuyUS$19,73107 Mar 19
Angus McCoss
EntityIndividual
Role
Member of the Board of Directors
Exploration Director & Executive Director
Shares8,550
Max PriceUS$2.31

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.1%.


Management Team

  • Brian Williams

    Vice President of Corporate Finance

    • Tenure: 19.9yrs
  • Paul McDade (56yo)

    CEO & Executive Director

    • Tenure: 2.7yrs
    • Compensation: US$2.76m
  • Angus McCoss (57yo)

    Exploration Director & Executive Director

    • Tenure: 13yrs
    • Compensation: US$1.56m
  • Chris Perry

    Head of IR and VP of IR & Communications

    • Tenure: 0yrs
  • Mark MacFarlane

    Executive Vice President of East Africa

    • Tenure: 0yrs
  • Sandy Stash (60yo)

    Executive Vice President of Safety & Sustainability

    • Tenure: 2.9yrs
  • Gary Thompson

    Executive Vice President of West Africa

    • Tenure: 2.9yrs
  • Claire Hawkings (49yo)

    Executive VP of Organisation Strategy & Company Performance

    • Tenure: 0yrs
  • Ian Cloke

    Executive Vice President of New Ventures

    • Tenure: 2.9yrs
  • Les Wood (57yo)

    CFO & Executive Director

    • Tenure: 2.5yrs
    • Compensation: US$1.64m

Board Members

  • Jeremy Wilson (54yo)

    Senior Independent Director

    • Tenure: 2.7yrs
    • Compensation: US$92.53k
  • Steve Lucas (64yo)

    Non Executive Director

    • Tenure: 7.8yrs
    • Compensation: US$80.99k
  • Paul McDade (56yo)

    CEO & Executive Director

    • Tenure: 2.7yrs
    • Compensation: US$2.76m
  • Martin Greenslade (54yo)

    Non-Executive Director

    • Tenure: 0.08yrs
  • Dorothy Thompson (58yo)

    Independent Chairman of the Board

    • Tenure: 1.4yrs
    • Compensation: US$139.95k
  • Mike Daly (65yo)

    Non-Executive Director

    • Tenure: 5.5yrs
    • Compensation: US$70.25k
  • Angus McCoss (57yo)

    Exploration Director & Executive Director

    • Tenure: 13yrs
    • Compensation: US$1.56m
  • Genevieve Sangudi (42yo)

    Non-Executive Director

    • Tenure: 0.7yrs
  • Sheila Khama

    Non-Executive Director

    • Tenure: 0.7yrs
  • Les Wood (57yo)

    CFO & Executive Director

    • Tenure: 2.5yrs
    • Compensation: US$1.64m

Company Information

Tullow Oil plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Tullow Oil plc
  • Ticker: TLW
  • Exchange: LSE
  • Founded: 1985
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: UK£641.963m
  • Shares outstanding: 1.41b
  • Website: https://www.tullowoil.com

Number of Employees


Location

  • Tullow Oil plc
  • 9 Chiswick Park
  • 566 Chiswick High Road
  • London
  • Greater London
  • W4 5XT
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TUWL.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
TLWLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
TQWISE (Irish Stock Exchange)YesOrdinary SharesIEEURJan 1992
TQWDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
TLWLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
TUWO.YOTCPK (Pink Sheets LLC)ADRUSUSDDec 2009
TLWGHSE (Ghana Stock Exchange)GBP0.1GHGHSJun 2019

Biography

Tullow Oil plc engages in the oil and gas exploration, development, and production activities primarily in Africa and South America. Its portfolio comprises 87 licenses covering 267,649 square kilometers i ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 20:39
End of Day Share Price2019/12/10 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.