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2014 revenue of $2.2 billion and pre-tax operating cash flow of $1.5 billion

Cost reductions, diverse funding, hedging and suspension of dividend provide financial flexibility   
Strong West Africa asset performance; TEN Project remains on track for first oil in mid-2016


“2014 was a difficult year for our industry and a challenging one for Tullow as our results today demonstrate. In response to this, and the fall in the oil price, we have reset our business and are focusing our capital expenditure on high-quality, low-cost oil production in West Africa. We have increased and diversified our sources of debt capital, reduced our exploration expenditure, implemented significant cost saving initiatives and we are suspending the dividend. These measures will provide us with substantial headroom and liquidity to deliver on our strategy. The TEN project in Ghana, which remains on track, will increase our net West Africa oil production to over 100,000 bopd by the end of 2016 generating substantial cash flows and placing Tullow in a strong position when the sector recovers.”


2014 Full Year Results Highlights

  • Revenues down 16% on prior year impacted by oil price decline in 2H 2014 and gas asset sales in Europe and Asia; Significant write-offs, impairment charges and a loss relating to the Uganda farm-down result in a loss after tax of $1.64 billion.
  • Debt facilities increased through the issue of a second tranche of Senior Notes of $650 million and refinancing of the Revolving Corporate Facility to $750 million; hedging programme with a mark-to-market value of around $500 million provides substantial revenue protection; Year-end 2014 net debt of $3.1 billion and facility headroom and free cash of $2.4 billion.
  • Review of cost base and efficiencies expected to deliver cash savings of around $500 million over the next three years which will be realised through reductions in capital expenditure, operating costs and administrative expenses.
  • West Africa working interest oil production averaged 63,400 bopd in 2014; Production guidance in 2015 for the region is 63-68,000 bopd; Jubilee field gross production averaged 102,000 bopd in 2014, forecast to average 100,000 bopd in 2015.
  • TEN Project in Ghana 50% complete; on budget and on track for first oil in mid-2016; ramp up towards FPSO facility capacity of 80,000 bopd gross around the end of 2016.
  • 2015 capital expenditure forecast to be $1.9 billion with further reductions targeted; this includes a materially reduced exploration and appraisal budget of $0.2 billion which includes basin-opening wells in Kenya, Norway and Suriname.
  • Dividend suspended; No final dividend payment for 2014 resulting in full year 2014 dividend of four pence per share.

Financial overview


FY 2014

FY 2013 


Sales revenue ($m)  2,213 2,647  -16% 
Gross profit ($m)  1,096 1,493  -27% 
    Administrative expenses ($m)  (192) (219)  -12% 
    (Loss)/profit on disposal ($m)  (482)  30 
    Goodwill impairment ($m) (133)   -  -
Exploration costs written off ($m)  (1,657) (871)   -
Impairment of property, plant and equipment  (596)  (53)   -
Operating (loss)/profit ($m (1,965) 381   -
(Loss)/profit before tax ($m)  (2,047)  313   -
(Loss)/profit after tax ($m)  (1,640)  216   -
Full dividend per share (pence)  4.0 12.0  -67% 
Operating cash flow before working capital ($m) 1,545  1,901  -19%