In 2015, Tullow acted very quickly to adjust the Company to a lower oil price environment. During the year, the Group took decisive actions: focused our capital on high-margin West African oil projects and the generation of cash flow; cut exploration expenditure; suspended our dividend; reviewed all current and future projects and focused on efficiency and substantial cost savings. All five of these key decisions were implemented during 2015 and helped to protect the balance sheet and funding position of the business. The Group undertook a restructuring project which resulted in improved organisational structure, efficient processes and reduced headcount of 37%, with an ongoing plan to deliver cash savings of around $500 million over a three year period. With these actions, Tullow was re-set to be resilient to lower oil prices and well positioned for future growth.
Despite these internal and external distractions, during 2015, Tullow’s production remained broadly flat at 73,400 boepd. The oil price averaged $52/bbl and at year end stood at $37/bbl, but the impact of lower prices was significantly mitigated by our prudent hedging strategy, which helped to underpin revenues of $1,607 million. Tullow’s focus on delivery was exemplified by the TEN Project in Ghana, which was over 80 per cent complete at the year end and remains on time and on budget to produce first oil in July-August 2016. Appraisal activity also continued in Kenya, and nine successful appraisal wells continued to underpin the discovered resource base and upside potential of the South Lokichar Basin.