Tullow targets potential buyout firms

TULLOW OIL has targeted a number of possible acquisitions in Northern Europe and West Africa and put in place borrowing facilities of up to €250 million to fund any buyouts.

Yesterday, the oil production and exploration company reported annual results broadly in line with expectations and announced it was to issue its maiden dividend of 1 cent per share.

Chairman Pat Plunkett told investors that Tullow was also actively considering acquisition opportunities and seeking to increase returns and capital efficiency through selective disposals and farmouts.

Shareholders were also told of the putting in place of a new acquisition banking facility of

$100 million, jointly arranged by Bank of Scotland, BNP Paribas and Royal Bank of Scotland.

“This facility may be increased to up to $250m in certain circumstances. While our primary focus will be on Northern European assets, where a number of opportunities are actively under consideration, we also believe that West Africa offers a wide range of opportunities for independent companies,” Mr Plunkett said.

Commenting on the impressive rates of growth: turnover up 47% to £112.6m; operating profit before exploration costs up 27% to £33.3m and pre-tax profit up 41% to £22.5m.

Mr Plunkett said: “This rate of growth would have been higher but for delays in the production build-up from the Espoir field, weaker gas prices and lower Pakistani output caused in part by a well workover programme that is now complete.”

Tullow new dividend policy is subject to approval by the Irish High Court of an application to write off the accumulated deficit on the Profit and Loss Account of Tullow’s Irish subsidiary against that company’s share premium account. Dolmen Securities rate the shares a buy with a 12-month price target of £1.20, a 60% upside.

However, the share value fell by 4.55% yesterday.