Tullow Oil - Board changes and trading update

Davy Research
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Tullow has announced that Paul McDade, the group’s COO, will assume the position of CEO following the AGM on April 26th. Aidan Heavey will become Chairman, a role at which he will remain for a maximum of two years. We do not think the Board changes will come as much of a surprise. In a trading update, Tullow has guided gross production of 50,000 bopd in 2017 from the TEN field. We believe the uncertainty regarding TEN’s production has kept a lid on Tullow’s share price despite a good farm-out of equity in its Ugandan asset. This uncertainty is likely to linger while a drilling moratorium delays definitive answers on TEN’s performance. Headline numbers for FY2016 are broadly in line with our estimates.