Financial results and KPI summary
Financial results and KPI summary
|Working interest production (boepd)||78,200||58,100||+35%|
|Sales volume (boepd)||66,800||47,400||+41%|
|Realised oil price per barrel ($)||108.0||78.0||+38%|
|Realised gas price per therm (pence)||57.0||42.0||+36%|
|Sales revenue ($m)||2,304||1,090||+111%|
|Cash operating costs per boe ($)1||13.5||12.5||+8%|
|Operating profit ($m)2||1,132||262||+332%|
|Profit from continuing activities before tax ($m)2||1,073||179||+499%|
|Profit for the year from continuing activities ($m)2||689||90||+670%|
|Basic earnings per share (cents)2||72.5||8.1||+795%|
|Cash generated from operations ($m)3||1,832||789||+132%|
|Operating cash flow per boe ($)3||64.2||37.2||+73%|
|Dividend per share (pence)||12.0||6.0||+100%|
|Capital investment ($m)4||1,432||1,235||+16%|
|Year-end net debt ($m)5||2,854||1,943||+47%|
|Interest cover (times)6||16.7||14.3||2.4 times|
Production, commodity prices and revenue
Working interest production averaged 78,200 boepd, an increase of 35% for the year (2010: 58,100 boepd). This reflects increasing production from the Jubilee field in Ghana, where First Oil was achieved in November 2010. Sales volumes averaged 66,800 boepd, up 41% compared to 2010.
On average, oil prices in 2011 were significantly higher than 2010 levels. Realised oil price after hedging for 2011 was US$108.0/bbl (2010: US$78.0/bbl), an increase of 38%. Tullow's oil production sold at an average premium of 1% to Brent Crude during 2011 (2010: 2% discount). UK gas prices in 2011 were higher than 2010. The realised UK gas price after hedging for 2011 was 57.0 pence/therm (2010: 42.0 pence/therm), an increase of 36%. Higher commodity prices and sales volumes resulted in an overall revenue increase of 111% to $2.3 billion (2010: $1.1 billion).
Realised oil and gas prices
2011 Group working interest production
Operating costs, depreciation and impairments
Underlying cash operating costs, which excludes depletion and amortisation and movements on the underlift/overlift, amounted to $386 million; $13.5/boe (2010: $264 million; $12.5/boe).
DD&A charges before impairment amounted to $514 million; $18.0/boe for the year (2010: $356 million; $16.8/boe). The Group recognised an impairment charge of $51 million; $1.8/boe (2010: $4.3 million; $0.20/boe) in respect of the M'Boundi field in the Congo due to field underperformance and an impairment reversal of $17 million; $0.6/boe in respect of the Chinguetti field in Mauritania due to improved field performance.
At the year-end, the Group was in a net overlift position of 220,000 barrels. The movements during 2011 in the underlift and stock position have given rise to a credit of $2.1 million to cost of sales (2010: credit of $35.6 million).
Administrative expenses of $122.8 million (2010: $89.6 million) include an amount of $23.6 million (2010: $10.2 million) associated with IFRS 2 – Share-based Payments. The increase in total general and administrative costs is primarily due to the continued growth of the Group during 2011 with Tullow's total workforce increasing by 26% to 1,548 people.
Exploration costs written-off
Exploration costs written-off were $121 million (2010: $155 million), in accordance with the Group's successful efforts accounting policy. This requires that all costs associated with unsuccessful exploration are written-off in the income statement. This write-off is principally associated with unsuccessful exploration activities in Ghana, Liberia, Gabon and the UK, together with new ventures activity.