Tullow Oil to become a major global player

TULLOW Oil stands on the cusp of a major breakthrough as a player of size within the global oil sector, analysts have said.

NCB Stockbrokers said they believed Uganda would deliver significantly for the group despite the lack of any proven reserves at this stage from the Uganda projects.

However, analyst Peter Hutton of NCB Stockbrokers pointed out that Tullow does not have the tests, let alone the proof, at this stage of the scale of discovery in Uganda. He said: “Their actions and behaviour are fully consistent with genuine and directed excitement. Uganda could indeed be a transformational discovery beyond the size of Tullow at its present scale.

‘‘Tullow looks to be on the edge of a seismic shift in their corporate scale and ultimate structure.’’

Job Langbroek of Davy Stockbrokers who has tracked the company has been a strong admirer of the group for quite some time.

Earlier this year he put a £4.00 valuation on the group’s shares which were just short of that figure in late trading yesterday.

Davys are brokers to the group and in its note following the briefing for the group’s own oil team noted that Tullow has close to 170 prospects and targets being looked at before the recent e1bn plus Hardman deal is included.

It looks as if over 20 wells will be drilled in 2007 while Tullow also indicated that the group was about to spread its footprint globally with around 25 new opportunities being looked at in various places around the world.

“Management has raised the bar on its ambitions and outlined its objective towards extending its growth, which we believe will be both through organic development and further acquisitions,” said analyst Gerry Hennigan.