Tullow Oil shares sink on Goldman Sachs downgrade

Shares in Tullow Oil nosedived by over 11% yesterday after the Irish-founded exploration firm was downgraded by two high profile brokers.

Both Goldman Sachs and Macquarie cut their ratings on Tullow — the former from ‘buy’ to ‘neutral’ and the latter from ‘outperform’ to ‘neutral’ — over concerns for the health of the company’s balance sheet.

Goldman Sachs expressed concern that Tullow’s planned spending in East Africa could diminish its free cash flow from 2018, while Macquarie suggested Tullow could sell its Ugandan assets, which cover four licences, to improve its finances.