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Bloomberg
Tullow Oil Plc shares had their biggest ever drop after a forecast for 2020 production that analysts said leaves dark clouds hanging over the company’s outlook.
The stock sank as much as 62% after London-based Tullow also said it would suspend dividend payments, while its chief executive officer and exploration director are to leave. It’s the second plunge in less than a month for the shares, which dropped 27% on November 13 after the company said it was reassessing the commercial viability of discoveries in Guyana, South America.
Tullow predicted output of 70,000 to 80,000 barrels a day— down from the 87,000 a day expected for this year — amid production difficulties at two key oil fields in Ghana.
“We were concerned that Ghana production would need to be rebased given recent performance from Jubilee and TEN, but the news today is materially worse than expected,†wrote Citi analyst Michael J Alsford, who has a neutral rating on the shares.
The latest slide also hurt sentiment for some other UK-listed mid-cap oil shares, with partner Kosmos Energy Ltd and close peer Premier Oil Plc falling 9.5% and 6.1% respectivaly at 11.10 a.m. in London. Tullow had pared its loss slightly, to 59%.