Last year, investors fled Tullow Oil Plc as crude prices sank. This year, it's the hottest stock in the European energy industry.
Tullow has almost doubled since January 1st in London trading, leading gains on the Stoxx Europe 600 Oil and Gas Index. It's a striking recovery for a company that slumped more than any other on the index last year, with a slide of 60 per cent.
“It’s a large, liquid stock which is highly geared to the oil price and is seen as being a go-to stock in the sector for investors looking for exposure to the oil price,” said Charlie Sharp, an analyst at Canaccord Genuity Group .
Cut production
Tullow has been helped by a 50 per cent jump in the price of crude this year, and has risen steeply since the Organisation of Petroleum Exporting Countries agreed to cut production at the end of last month.
The London-based company also started output from its $4.9 billion TEN project off Ghana in August, one of the biggest projects to come on stream in Africa this year.
“There are some operational successes, but I think it’s largely oil-price driven,” said Mr Sharp. “If the oil price stabilises, I suspect that the momentum will move away.”
