The CEO states Tullow sp is much too low and I bought in on the comments---todays results are excellent and I feel this one is being overlooked on here. check it out bargain hunters-I'd welcome some expert feedback!

worth reading ST Biz section today ......
long articles on both QPP and vulnerability of small and med sized E+P companies, witrh particular mention of both TLW and AFR

Sunday Times -

hxxp://www.thesundaytimes.co.uk/sto/business/Industry/article1495615.ece

THE plunging oil price has unleashed chaos on the London market, with some listed oil explorers trading for less than their cash reserves and others eyeing takeovers at levels that were unthinkable just a few months ago.

Since hitting nearly $115 a barrel this summer, the price of oil has plummeted 45%. Brent crude closed on Friday at $61.5.

The fall is likely to lead to a flurry of collapses and long-coveted deals amid predictions that the swoon will continue into 2016 and could see the oil price dip to $50 or even lower.

Spain’s Repsol, for example, is closing in on a bid for Talisman, which is listed in Canada and has operations in the North Sea.

The companies held talks in July but called them off because they couldn’t agree on price. After that, Talisman’s share price collapsed by two-thirds before jumping this week on hopes of a new deal. It is thought that Repsol is looking to take out the company for as little as C$6 (£3.30) a share, or C$6bn — less than half its value a year ago.

Anthony Lobo, head of oil and gas at KPMG, predicted that many of the industry’s small and medium-sized players could be gobbled up, especially in all-share deals.

The share prices of industry heavyweights such as BP and Shell have fallen far less dramatically than those of their small rivals.

Lobo said: “Their shares now hold much greater value as takeover currency. We are going to see a lot of corporate activity. The majors are geared up for it.”

The pain for some is extreme. Shares in Ophir Energy, the London-listed explorer, have plunged by two-thirds this year. On Friday the company’s market value was £700m, which is less than the $1.5bn in cash it had on its balance sheet in June.

The plunge has thrown into doubt its takeover of rival Salamander Energy because the companies’ share prices have begun to diverge widely from the intended swap ratio.

Tullow Oil is also seen as one of the most vulnerable to an opportunistic offer. Its portfolio of big fields in Africa has long been coveted by larger rivals but its share price was seen as prohibitively high. From a high of £15.66 three years ago, it closed on Friday at £3.67.

Another big faller has been Afren. Its share price has dropped 80% this year to 35p. The Nigerian producer’s stock was first laid low after it uncovered a big unauthorised payments scheme engineered by its chief executive and other directors.

Its problems have been exacerbated by concerns over its $1.2bn debt pile. It is thought that at least two suitors are circling the company at present.

Providence Resources, meanwhile, is close to signing a deal with Sequa Petroleum to fund the development of its Barryroe reservoir in the Celtic Sea.

Providence, 15% owned by beleaguered tycoon Sir Anthony O’Reilly, is running out of time. It took out $24m in loans from Melody Business Finance, a New York hedge fund, and it must repay the money in June

given the precipitous fall over the last year of this once darling, it is dangerous to say "it's fallen enough and is now cheap or even excellent value"

anyway, for my sins, i bought some yesterday for my sipp at 368, so at the moment i'm certainly happy enough

The 'experts' are still predicting further falls in the price of crude, with the start of a possible turnaround mid 2015, so if they are right, all of these stocks have further to fall, imo. OPEC members can't agree amongst themselves on a cut in production, so until they get their act together, sub $50 pb looks likely.
It's all about timing when to get back in to this sector, but still a bit early I think.

But worth bearing in mind that markets tend to look around 6 months ahead, so around end of year may be low point for oil stocks.

harry - what you say is correct, but a side effect is that companies with proven and/or productive reserves become considerably more desirable, especially as their sp will have been battered more than your local saveloy

ooooh matron

I believe the nadir was around $30 a barrel in the depths of the crisis in 2009.

With the creationism of billions of new dollars subsequently is $50 about near the bottom? Just my thoughts.

Exane on the oil sector:
With OPEC choosing not to cut quotas, the onus now rests on non-OPEC producers to balance the market unless there is a strong demand response to soak up the oversupply of c.1.7mb/d through H1 15. The oil price collapse has triggered a number of capex cuts across the industry, with US onshore leading the way. We model a 25% fall in the US oil rig count through end 2016, by which point we see oil production being c.1.4mb/d lower vs initial expectations, which should be enough to rebalance the market by 2017. We cut our 2015/16/17 Brent forecasts from USD100/90/92/bbl to USD67.5/75/80/bbl. On average we cut NAVs by c.40% – the stocks are pricing USD65/bbl LT. We test a variety of scenarios from LT Brent of USD90/bbl down to USD50/bbl; we find that at low oil prices, every company with covenants (AFR, LUPE, MAU, PMO, TLW) is likely to breach them.
However, these companies have some options that could help them weather the storm – Afren (down to U/P) is most exposed at USD50/bbl over 2015-17. We believe TLW could meet it's covenants at a flat USD50/bbl oil price scenario until 2017 without cutting its dividend. The stocks most levered to oil prices are PMO & AFR; the least are Seplat, SOCO and Cairn.
We believe that Premier should not sanction Bream (USD83/bbl breakeven), and Sea Lion should again be revisited in 2016 given that the carry arrangement pushes the breakeven to c.USD63/bbl long term. On this basis we downgrade PMO (=), RKH (-). We believe that operator BG is likely to slow Ophir’s Tanzania LNG project at current prices. On the flipside, we believe that Sverdrup (LUPE), Kenya (AOI, TLW) and Uganda (TLW, government permitting) should all be sanctioned.

StockMarketWire.com
Tullow Oil said steps taken to strengthen the business to adapt to current market conditions will continue during 2015 to ensure the Group is in a position to benefit when conditions improve.

"In late 2014, we materially reduced our 2015 exploration capital expenditure and today announce a further cut to this expenditure to $200 million," said CEO Aidan Heavey.

"We continue to carry out a review of the business to streamline processes and improve efficiencies which will result in significant long-term cost savings.

"We have re-allocated our future capital to focus on delivering high-margin oil production in West Africa which will grow significantly to around 100,000 bopd net to Tullow by the end of 2016 and will generate stable, long-term cash flows for the business. The reduced exploration programme will predominately focus on a number of high-impact, low-cost exploration opportunities in East Africa.

"While this is a challenging time for our sector, Tullow is fortunate to benefit from world-class, low cost and high margin assets, strong and growing cash flows and a broad, diversified funding position."

Tullow expected to report revenue of $2.2 billion, gross profit of $0.6 billion and pre-tax operating cash flow of $1.5 billion, which is underpinned by the strong performance from our West Africa oil production.

"These results, versus the prior year, have been impacted by the oil price decline and lower gas production following asset sales in Europe and Asia," the company said in a trading statement.

"In the Interim Management Statement in November, Tullow indicated that total non-cash write-offs and impairments for 2014 were likely to be substantial following a review of the Group's three year investment plan.

"Tullow expects a write-off of $0.4 billion ($0.3 billion post-tax) in relation to 2014 exploration activities primarily relating to Norway, Mauritania and Ethiopia.

"In light of the dramatic fall in the oil price, the review has resulted in non-cash exploration write-offs relating to drilling and licence costs from prior years of $1.2 billion ($0.9 billion post-tax). These are largely in relation to previously reported unsuccessful offshore drilling activities in French Guiana, Mauritania and Norway.

"The impairment charge for the year is expected to total $0.6 billion as a result of a review of carry values of all PP&E assets at current commodity prices and the impairment of goodwill related to the acquisition of Spring Energy.

"In addition, a loss on disposal charge is expected of $0.5 billion, mainly relating to an updated assessment of the recoverability of the Uganda contingent consideration and the partial sale of the UK Schooner and Ketch gas fields.

OPERATIONAL UPDATE
In 2014, underlying West Africa production performance was within guidance averaging 65,300 bopd. However, due to ongoing licence discussions in Gabon, which are yet to conclude, Tullow will report in 2014 a reduced working interest production of 63,400 bopd.

In Europe, production performance was within guidance averaging 11,800 boepd which includes the impact of asset sales completed in 2014. Production guidance for 2015 from the West African and European regions is 63,000-68,000 bopd and 6,000-9,000 boepd respectively. Europe guidance is subject to further ongoing portfolio management activities and production guidance will be adjusted following completion of sales.

In Ghana, the Jubilee field exceeded its gross production target during 2014 averaging 102,000 bopd despite the restrictions caused by delays in the construction of the onshore gas processing plant by the Ghana National Gas Company. In 2015, average gross production is expected to be at a similar level with production building towards the FPSO capacity by the end of the year.

The gas plant is now complete and first commissioning gas was exported in November 2014 from the Jubilee field. As the gas management constraint is reduced due to increasing gas export, Tullow will be able to increase the oil production from Jubilee.

Elsewhere in Ghana, the important TEN development project is progressing very well and is now over 50% complete and remains within budget and on-track to deliver first oil in mid-2016.

Tullow had strong underlying performance in 2014 from its non-operated fields in West Africa. The Group aims to maintain the portfolio of fields producing at around 30,000 bopd net to Tullow for the medium term. By the end of 2016, Tullow expects to have around 100,000 bopd of high-margin, low break-even oil production from West Africa.

In East Africa, the South Lokichar Exploration and Appraisal programme continues with drilling recently completed at the Ngamia-5 and Ngamia-6 wells. In addition, the Amosing wells are being prepared for the first Extended Well Test in Kenya.

The frontier exploration programme continues outside of the South Lokichar basin with the result of the Epir-1 well expected later this month. The Engomo-1 well, testing the Turkana West Basin, has commenced drilling. The Lekep-1 well, testing the Kerio Valley Basin, is expected to be drilled in the second half of 2015 along with multiple appraisal wells in South Lokichar as work progresses on the East Africa development plan.

Up about 9% today ........... beware .
It is said that Shell are interested in making a bid I understand.
Look back six or more months ago - we have had previous of rumours of bids for TLW.
Where do these TLW rumours originate from ????

Maybe I'll wait a few days then risk shorting TLW ???

28 Jan Westhouse... 600.00 Buy
22 Jan Westhouse... 770.00 Buy
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They are at it again ! ,do these folk at westhouse just throw darts to pick prices ?
The same broker that had AFR at 90P one day and 2P the next .

I agree - Westhouse, have let themselves down - they seem useless at valuing.

Are they brokers or what ??? What do they do for a living ?? Who needs them ??

Worth a punt in at the open on the spreads @ 408.6 (Mar) won't hang about stop @ 396.6

Stop to entry for risk free trade.

very happy to see this as i am a holder, but PMO which i also hold, has done even better

either/or/both could possibly become t/o targets

Never traded this cynic, so a wee bit nervous hence the caution. Full year results on 11th Feb so fingers crossed.