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Tullow Oil plc (Tullow), the independent oil and gas exploration and production group, announces its half-yearly results for the six months ended 30 June 2014.

Strong revenues and cash flow; results in line with market expectations

Balance sheet strengthened through bond issue and re‑financing

Exploration successes in Kenya, Gabon and Norway

Major developments in West and East Africa progressing well

 
2014 Half-yearly Results Highlights

  • Revenues and gross profit for the period in line with expectations; exploration write-offs and a loss relating to the Uganda farm-down result in a loss after tax; interim dividend remains unchanged at 4p
  • Balance sheet well funded following second $650 million bond offer and $750 million re‑financing of corporate revolving credit facility; net debt and unutilised debt capacity at period end of $2.8 billion and $2.3 billion respectively
  • West African oil production averaged 63,900 boepd in the first half; strong underlying performance from core assets offset by non‑booking of c.3,000 boepd due to ongoing license negotiations in Gabon. Full year guidance for the region remains 64‑68,000 boepd. In Ghana, the Jubilee field is on target to average full year gross production of 100,000 boepd
  • European gas production averaged 14,500 boepd in the first half, below expectations due to underperformance at Schooner‑11. Full year guidance for the region revised to 13‑14,000 boepd. Sale agreed for Schooner and Ketch in the UK Southern North Sea to Faroe Petroleum (U.K.) Limited for a total consideration of $75.6 million
  • Good progress in major West and East Africa developments; TEN project in Ghana 30% complete, on budget and on track for First Oil in mid‑2016; important MoU signed with Government of Uganda; Government of Kenya and the Partners are aligned in their ambition to reach project FID for development by the end of 2015 / early 2016
  • Exploration in Kenya continues with wildcat successes at Amosing‑1 and Ewoi‑1 supporting the Pmean discovered resource estimate of 600 mmbo; E&A campaign continues in the second half and into 2015 with basin and play testing campaigns in Kenya, Norway, Suriname and Gabon

Financial overview

  1H 2014 1H 2013 Change
Sales revenue ($m) 1,265 1,347 -6%
Gross profit ($m) 673 764 -12%
Administrative expenses ($m) (120) (89) 35%
Loss on disposal ($m) (115)
Exploration costs written off ($m) (402) (176) 128%
Operating profit ($m) 36 500 -93%
(Loss)/profit before tax ($m) (29) 486 -106%
(Loss)/profit after tax ($m) (95) 313 -130%
Interim dividend per share (pence) 4.0 4.0
Operating cash flow before working capital ($m) 905 1,016 -11%
Production (boepd, working interest basis) 78,400 88,600* -12%

* 1H 2013 production includes 3,900 boepd from Bangladesh which was subsequently sold in December 2013.

 

Commenting today, Aidan Heavey, Chief Executive, said:

“In the first half of 2014, Tullow made further important discoveries in Kenya and Norway and we have a concentrated exploration campaign planned for the next 18 months. We have also made good progress with the TEN project in Ghana, with our discussions with host governments on our developments in East Africa and with our financing. With strong revenues and cash-flow from our existing production and a well funded and diverse balance sheet, Tullow is well placed for the remainder of this year and into 2015.”

Download full results statement