F&C comments on Tullow Oil FTSE 100 listing

Phil Doel, manager of the F&C UK Opportunities fund, comments on the inclusion of Irish oil and gas exploration and production company Tullow Oil in the FTSE 100 index. "Tullow Oil has been promoted to the FTSE100 Index as a result of a significant recent increase in its market capitalisation. This has been driven by the drilling results over the last few months in two of its key exploration areas. In Ghana Tullow Oil and its partners has made a very significant new discovery, which a follow-up appraisal suggests is very sizeable – with possibly in excess of 1 billion barrels of oil in place. This comes on the back of an ongoing and highly successful campaign in Uganda where a whole new basin appears to have been discovered and with a "blue sky" potential that could be equally significant.

"The challenge for Tullow will be in harvesting these exciting finds into free cashflow over the coming years, whilst maintaining a drilling exploration and appraisal program that has the potential to keep adding incrementally to the value of the group. For example, in order to monetize the Ugandan finds it is likely the company will need a major partner to build a 1,300km long pipeline to the coast. In the near term, however, we expect more news on drilling activities in both these key provinces to continue over the next six months, hopefully continuing to push forward the group's estimated reserves and resources further still," concluded Doel.