Sell your Tullow and buy BP
Published 01/08/2010 | 05:00
Anyone lucky enough to have bought Tullow shares at the beginning of July will have seen their investment gain more than a quarter over the past month. The shares ended last week at €14.95, up from just €11.70 at the start of July.
Last Monday the company announced the discovery of another oil well in the west African country of Ghana. On Tuesday came the news that Tullow had successfully completed the acquisition of the 50 per cent share of the exploration interests in Uganda that it didn't already own for $1.35bn, and on Wednesday Tullow announced successful appraisal results.
Tullow is now the most valuable Irish company, with a market capitalisation of €13.25bn. Compare that with BP, whose market value has fallen Stg£76bn (€91.2bn) since the Gulf of Mexico oil spill began.
So is Tullow worth more than a seventh of BP? I know BP has had its problems, but I don't think so. Now that the oil leak has been plugged and Tony Hayward has been sacked as chief executive my advice is to sell Tullow and buy BP.