Tullow Oil share price outlook as energy profits jump

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Tullow Oil (LON: TLW) share price has crawled back recently as oil and gas companies record bumper profits. The shares rose to a high of 41.25p, which was about 12% above the lowest level this year. This price remains about 36% from the lowest level this year.

Oil and gas companies thrive

Tullow Oil is a small-cap energy company that has operations in emerging market countries like Ghana and Kenya. 

The company has had a successful year, helped by the relatively elevated crude oil and gas prices. In September, the firm said that its total first-half revenue was over $846 million, higher than the $727 million it made in the same period in 2021. 

Its gross profit almost doubled to over $620 million while profit after tax rose to $264 million. In the same period, its net debt rose from $2.2 billion to $2.3 billion. 

Analysts expect that Tullow Oil will publish strong results for the second half of the year. Besides, Brent crude oil has remained above $85 for the most part. Other oil companies like Shell and TotalEnergies reported strong quarterly results this week, as we wrote in this report.

Tullow Oil also suffered a setback in September after Capricorn Energy. The deal would have created a bigger African-focused oil company. Instead, Capricorn agreed to merge with NewMed, an Israeli natural gas company. Capricorn had faced sharp criticism from some of its biggest investors about the deal. 

The next key catalyst for the Tullow Oil stock price will be the upcoming earnings by other oil and gas companies like BP and Exxon. Tullow Oil’s management is also expected to have a capital markets update on December 7. In it, it will present on its future and provide an update about its key operations in Kenya. 

Analysts are relatively bullish on the TLW share price. Those at Barclays boosted their target to 80p, which is almost double fromwhere it is. The average forecast for the stock is 75p, which is about 85% above the current level.

Tullow Oil share price forecast

The daily chart shows that Tullow Oil shares have been in a bearish trend in the past few months. It has dropped below all moving averages. The stock dropped below the important support level at 40.88p, which was the lowest level in November 2021.

Now, the stock has formed a break and retest pattern. It has also formed a small shooting star pattern. Therefore, the shares will likely continue falling as sellers target the next key support level at 35.82p, which was the lowest level this month.

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