Related documents

Business re-set to meet the challenge of lower oil prices

First half 2015 financial results underpinned by strong oil production 

TEN Project in Ghana remains on schedule and on budget for first oil in mid-2016


  • Financials in line with expectations; impacted by oil price decline with average realised oil price after hedging for 1H 2015 of $70.6/bbl (1H 2014: $106.7/bbl); operating profit of $97 million, up 169% (1H 2014: $36 million) mainly due to a lower exploration write-off of $88 million (1H 2014: $402 million) resulting in reduced loss after tax of $68 million (1H 2014: loss of $95 million).
  • Net debt at end 1H 2015 was $3.6 billion with facility headroom and free cash of $2.3 billion; 60% of 2015 entitlement production hedged with an average floor price of $86/bbl; no debt maturities ahead of TEN Project coming on stream.
  • 1H 2015 capital expenditure of $783 million (1H 2014 $1,048 million); 2015 full year forecast remains $1.9 billion.
  • The Group’s restructuring programme has resulted in a significant headcount reduction across the business which, with other related cost savings, will total $500 million over three years. These savings will start to be recognised in 2H 2015 as lower cost allocations are made to G&A, opex and capex. 
  • 1H 2015 West Africa oil production within guidance averaging 66,500 bopd with Jubilee averaging 105,000 bopd gross; full year guidance remains 66,000-70,000 bopd however gross Jubilee average production is now expected to revert to previous guidance of 100,000 bopd following short term production constraints due to a gas compression issue on the FPSO.
  • TEN Project in Ghana c.65% complete; on schedule and on budget for first oil in mid-2016.
  • In East Africa, Kenya Extended Well Testing and appraisal drilling continues to underpin resource base; Uganda CGT dispute settled.
  • Exploration campaign in 2H 2015 currently focused on Suriname (Spari), Norway (Salander) and Kenya (Cheptuket).



“Our financial results for the first half of 2015 are in line with market expectations and reflect the re-setting of our business in response to the weaker oil price. Revenues are lower due to the fall in oil price and asset sales but our hedging programme offset some of the impact. Our underlying cash generation remains solid and the restructuring programme is nearing completion and will deliver cost savings of $500 million over the next three years. We are making good progress with our major development projects in West and East Africa. With the TEN Project on schedule and on budget for first oil in mid-2016, our West Africa oil production is set to grow to around 100,000 bopd net to Tullow in 2017. We also continue to build an inventory of exploration prospects to provide options for growth in the future.”

Financial overview


1H 2015

1H 2014 


Sales revenue ($m)  820 1,265  -35% 
Gross profit ($m)  342 681  -50% 
Operating profit ($m) 97 36  169%
Loss before tax ($m)  (10)  (29)  66%
Loss after tax ($m)  (68)  (95)  28%
Operating cash flow before working capital ($m) 515 905  -43% 
Interim dividend per share (pence)  4.0p  -100%