First half revenues of $0.8 billion, gross profit of $0.3 billion and free cash flow of $0.2 billion
Free cash flow and Rights Issue reduce net debt by c.$1 billion to $3.8 billion
New Executive team appointed focused on financial discipline and a return to growth
PAUL McDADE, CHIEF EXECUTIVE OFFICER, COMMENTED TODAY:
“Despite continued challenging market conditions, Tullow performed well in the first half of 2017 delivering strong revenues and organic free cash flow. Combined with the Rights Issue completed in April, this has allowed us to retain operational and financial flexibility and reduce our debt during the first half by around $1 billion. Since taking over as CEO, I have appointed a new and highly experienced Executive team who are focused on returning Tullow to growth through financial discipline, efficient use of capital and by delivering on the potential of our diverse portfolio of low-cost production, development and exploration assets.”
2017 Half Year Results Summary
- Revenue of $0.8 billion. Gross profit of $0.3 billion. Free cash flow of $0.2 billion. Post tax loss of $0.3 billion after impairments.
- Net debt reduced by c.$1 billion since year-end to $3.8 billion at the half year following generation of free cash flow and $750 million Rights Issue in April 2017. Facility headroom and free cash now $1.2 billion.
- 2017 Capex guidance reduced from $0.5 to $0.4 billion. Will reduce to $0.3 billion on completion of the Uganda farm-down.
- Three-year cash cost savings target revised up from $500 million to $650 million.
- West Africa net working interest oil production, including production-equivalent insurance payments, averaged 81,400 bopd in 1H 2017. Full year guidance of 78,000 to 85,000 bopd remains unchanged.
- Jubilee Turret Remediation Project making good progress with costs being offset by insurance payments. Greater Jubilee Full Field Development Plan (GJFFD) submission to Government of Ghana on track.
- TEN production performance in line with expectations, preparations under way to resume drilling later in the year subject to the ITLOS decision.
- Farm down of assets in Uganda will provide upfront cash on completion and deferred payments to cover upstream and pipeline capex to first oil and beyond.
- Kenya exploration and appraisal programme continues with a further three wells planned in second half of 2017; Full Field Development continues to make progress towards FID.
- Significant progress across our exploration portfolio with seven seismic campaigns in 2017, numerous successful farm-downs and preparations on track to drill the high-impact Araku-1 well in Suriname in the fourth quarter of 2017.
- Paul McDade appointed CEO in April 2017; Aidan Heavey became non-executive Chairman. Les Wood appointed CFO in June 2017 following Ian Springett’s resignation from the Board due to ill-health.