Results centre
2009 Full year results
Tullow delivered another outstanding year in 2009 and the pace of activity continues as we move into 2010, with some remarkable achievements already. We fully expect 2010 to be another strong year. We plan to consolidate the exceptional progress achieved in the last five years and leverage our unique position, particularly as Africa's leading independent oil company.
Continued exploration success
Results in line with market expectations
Poised for major production growth in Ghana and Uganda
10 March 2010 - Tullow Oil plc (Tullow), the independent oil and gas exploration and production group, announces its results for the year ended 31 December 2009.
Results summary
The reported financial results for 2009 are in line with market expectations and down compared with 2008. The successful completion of new debt facilities and equity placings, coupled with the proposed Uganda farmdown, are major steps in ensuring that the Group remains well funded to continue to execute its medium term exploration, appraisal and development programmes.
| 2009 | 2008 | Change | |
| Sales revenue (£m) | 582 | 692 | -16% |
| Operating profit (£m) | 95 | 300 | -68% |
| Profit before tax (£m) | 20 | 299 | -93% |
| Profit after tax (£m) | 19 | 226 | -92% |
| Basic earnings per share (pence) | 1.9 | 30.9 | -94% |
| Final dividend per share (pence) | 4.0 | 4.0 | +0% |
| Operating cash flow before working capital (£m) | 374 | 519 | -28% |
| Production (boepd, working interest basis) | 58,300 | 66,600 | -12% |
| Realised oil price (US$ per bbl) | 60.0 | 73.6 | -18% |
| Realised gas price (pence per therm) | 39.3 | 52.4 | -25% |
Key highlights
- Outstanding exploration performance: 13 discoveries from 15 wells
- Major discoveries: Jobi-Rii (previously Buffalo-Giraffe) in Uganda; Tweneboa in Ghana
- Venus wildcat result extends the Jubilee play to the Equatorial Atlantic Liberian and Guyana Basins
- Total and Shell farm in to French Guiana supporting Jubilee play extension to South America
- Exercised pre-emption over Heritage Oil's Ugandan sale in Jan 2010 for up to US$1.5 billion; CNOOC and Total proposed as new joint venture partners in Uganda to facilitate aligned and accelerated basin development
- Jubilee project remains on schedule and on budget; first oil expected Q4 2010
- US$2.25 billion debt facilities secured; £1.33 billion raised through equity placings in 2009 and 2010
Download Tullow Oil plc 2009 Full year Results (PDF, 665KB, opens in a new window)
AFRICA
2009 Results highlights
| Total production | Total reserves and resources | Sales revenue | 2009 investment | |||
| 38,500 boepd | 831.0 mmboe | £409.5 million | £696.3 million |
- 2009 working interest production averaged 38,500 boepd
- 87% exploration and appraisal success rate
- Jubilee development remains within budget and on track for Q4 2010 first oil
- Tweneboa - significant oil and gas-condensate field discovered in Ghana
- Jubilee play extended to Tullow acreage in the Equatorial Atlantic Liberian and Guyana Basins
- Jobi-Rii - Largest recent oil discovery onshore sub-Saharan Africa
- CNOOC and Total - potential to add very strong partners to support development in Uganda
REST OF THE WORLD
2009 Results highlights
| Total production | Total reserves and resources | Sales revenue | 2009 investment | |||
| 19,800 boepd | 62.7 mmboe | £172.8 million | £60.1 million |
- 2009 working interest production averaged 19,800 boepd
- Jubilee-type play potential identified in South American acreage
- Shell and Total - major partners introduced in French Guiana
- Restructuring of Pakistan to non-operated business completed
Download Tullow Oil plc 2009 Full year Results (PDF, 665KB, opens in a new window)
Historically Tullow has primarily been funded through a combination of operational cash flow, portfolio management and reserve based debt facilities. The scale of our current exploration portfolio, exceptional exploration success and associated appraisal, together with the fast-track development of two world-class basins in Ghana and Uganda, have resulted in a number of important operational and financial strategic decisions being taken in 2009 and 2010. These will enable the Group to continue to grow the business underpinned by an appropriate capital structure. Key decisions have included:
- An operational focus on the development of Jubilee Phase 1 in Ghana , the commercialisation of the Lake Albert Rift basin in Uganda and a high impact exploration drilling programme
- Raising £402 million of equity and extending the reserves based lend debt facility to $2 billion (£1.3 billion) in the first quarter of 2009; and adding a Corporate debt facility of $250 million (£160 million) in December 2009
- Taking a decision to pre-empt the sale of Heritage Oil and Gas' Ugandan assets and then farming down our interests by bringing in partners to deliver a unified and accelerated basin development plan
- Raising a further £925 million of equity in January 2010 to facilitate the Uganda pre-emption and then, after the farmdown, to provide substantial financial flexibility for the foreseeable future
From a financial perspective, these decisions should allow Tullow to comfortably bridge the gap between the current cash and profit generating ability from the Group's existing mature production portfolio into more significant production and cash flow in the future commencing with Jubilee Phase 1 production in the fourth quarter of 2010.
| 2009 full year results | 2009 | 2008 | Change |
| Production (boepd, working interest basis) | 58,300 | 66,600 | - 12% |
| Sales volume (boepd) | 46,100 | 55,000 | -16% |
| Realised oil price per bbl (US$) | 60.0 | 73.6 | -18% |
| Realised gas price (pence per therm) | 39.3 | 52.4 | -25% |
| Cash operating costs per boe (£)1 | 7.28 | 5.90 | + 23% |
| Operating cash flow before working capital per boe (£) | 17.5 | 21.3 | - 18% |
| Net debt (£ million) 2 | 718 | 400 | + 80% |
| Interest cover (times) 3 | 10.2 | 17.8 | - 7.6 times |
| Gearing (%) 4 | 47 | 30 | + 17% |
- Cash operating costs are cost of sales excluding depletion, depreciation and amortisation and under/over lift movements
- Net debt is cash and cash equivalents less financial liabilities
- Interest cover is earnings before interest, tax, depreciation and amortisation charges and exploration written off divided by net finance costs
- Gearing is net debt divided by net assets
2009 financial results were down compared with the record results recorded in 2008 primarily because of the following:
- Production volumes were 12% lower due to natural decline and the focus on Ghana and Uganda developments
- Lower oil and gas prices; and the impact of sterling weakness on dollar based costs
- Exploration write-offs were £174 million lower in 2009, but this was more than offset by asset disposal proceeds that were £231 million higher in 2008
- An IAS 39 charge of £37 million in 2009 compared with a benefit of £43 million in 2008
Download Tullow Oil plc 2009 Full year Results (PDF, 665KB, opens in a new window)
The outlook for 2010 is very positive for Tullow. First oil from Jubilee in the second half of 2010, the Group's equity fund raising and the successful completion of the Ugandan farmdown will all ensure that Tullow is adequately capitalised to fund its growth strategy.
Download Tullow Oil plc 2009 Full year Results (PDF, 665KB, opens in a new window)
