Tullow Shares fail to shine

THE share price of Tullow Ghana, partners of the country’s Jubilee Oil Field, last week, witnessed record low depreciations on the Ghana Stock Exchange after the company said its production targets for 2012 would average between 70,000 to 90,000 barrels of oil per day (bopd) and not the projected 120,000 bopd.


The announcement mid last week saw Tullow Ghana’s share price on the Accra bourse dipping from an initial GH¢31 to GH¢30 as its shareholders rushed to sell.

The current share price is the lowest to be recorded by the company since its listing on the local bourse in July last year.

A stock market analyst at CDH Financial Holdings and a partner with Akotia and Partners, Mr Aseye Akotia, told the Daily Graphic the fall in Tullow Ghana’s share price on the back of the announcement could have been informed by “investor’s perceptions that the company’s low production targets for 2012 could very likely affect its profitability levels in the year.

“Investors of Tullow may think that the low production targets could lower its turnover for the year, bring its profits down and subsequently limit it from paying dividends to shareholders. So, some think they are better off selling their shares in the company than keeping them,” he said.

Although Mr Aseye would not say if the decline in Tullow’s share price would continue into this week, he admitted that more people could be pushed into selling their shares “especially now that the share price has already declined.”

Tullow Ghana was listed on the GSE after successfully floating 3,531,546 shares at GH¢31 per share.

The company’s listing caused the GSE’s market capitalisation to more than double; a development that saw the country’s stock market becoming one of the most capitalised in sub-Saharan Africa.

Tullow Ghana’s listing on the Accra bourse was tipped to generate excitement on stock activities in the country as more people cluttered for an opportunity to own a part of a company that drills Ghana’s premier oil.

Such an excitement is, however, yet to be felt as the company’s share price has virtually seen any activity after its listing mid last year.

The company’s share price declined from the initial GH¢31 with which it listed to GH¢30 sometime last year. The price rose marginally before declining again to the current GH¢30 which has been heavily influenced by the reduction in its end of year production targets for 2012.

Mr Akotia of Akotia and Partners attributed the dull activity recorded by the company on the bourse to an industry-wide phenomenon.

“Generally, the market has been bad for most listed equities especially for last year and Tullow was not an exception,” he said.

The share price of the company, he said, was not moving up “not because the company is not performing but because the market itself is dull,” Mr Akotia added.