Secondary Recommendation

Tullow Oil - Bold acquisition transforms prospects

September 2004

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

FTSE-250 firm, Tullow Oil, has been making waves following its cheeky acquisition in May of Energy Africa, a South Africa based oil e&p firm, which has a dual listing on the Johannesburg and Luxembourg Stock Exchanges. Strategically the US$570m (Â£319m) deal was just about perfect, more than doubling the enlarged group's production from 25,000 barrels of energy per day (boepd) to 54,000, andincreasing proven and probable reserves from 70m to 175m. Another attractive feature is Energy Africa's exploration portfolio, which is one of the most highly regarded in the industry. Yet Tullow bought Energy Africa at no premium to the latter's underlying share price, opportunistically taking advantage of a debilitating bou ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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