High-profile hedge funds still circling Tullow Oil, as debt-laden driller mounts fightback
A number of well-known hedge fund short sellers continue to target London-listed oil and gas company Tullow Oil, as the beleaguered exploration firm looks to overhaul its business model and improve its balance sheet position.
Pictet Asset Management, the investment management and hedge fund arm of wealth management giant Pictet Group, grew its short position in the FTSE250 name from 1.47 per cent to 1.55 per cent this week.
Värde Partners Europe meanwhile has a 2.53 per cent net short position in the multinational oil and gas explorer, according to regulatory disclosures.
Odey Asset Management, the long-running London-based manager founded by high-profile bear Crispin Odey, and Whitebox Advisors are also betting against the firm.
Tullow, which has a market cap of some USD596 million, is in the process of overhauling its business model to help slash its USD2.4 billion debt. This includes offloading assets in Equatorial Guinea and Gabon to Panoro Energy, and concentrating its focus on offshore fields in Ghana.
The London-listed E&P stock’s market value has fallen off a cliff in recent years, though in the short-term its share price has been on an upward trend – reaching a six-month high of 38.79 at one point on Tuesday morning.
Tullow has long been the subject of hedge funds’ negative wagers. In the past, brand name hedge funds including Marshall Wace, Lansdowne Partners, BlackRock Institutional Trust and Squarepoint have all weighed in with bets against the firm.
Earlier this month, Tullow CEO Rahul Dhir said discussions between the debt-laden firm and its creditors, including bondholders, are expected to end in Q2 with a focus on matching maturities with expected cashflows.