Financial results and KPI summary
Financial results and KPI summary
| 2011 | 2010 | Change | |
|---|---|---|---|
|
|||
| 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 |
| Gearing (%)7 | 60 | 50 | +10% |
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
 |
Oil | 73% |
 |
Gas | 27% |
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.
