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Transformational year with major exploration success
Results Summary
2007 was an exceptional year for Tullow. The Group recorded its largest ever discovery, the Jubilee field offshore Ghana, continued its successful exploration in Uganda and generated record production, sales revenue, operating cash flow and growth in reserves and resources.
- The financial performance of the Group overall was good, including operating cash flow before working capital of £474 million, despite lower profit which was principally impacted by lower UK gas prices, an increased depreciation charge, exploration write-offs and interest charges;
- Tullow's African assets have transformed the Group's business, driven by exceptional exploration success in Ghana and Uganda and strong production growth, up 21% to 40,300 boepd;
- The UK delivered a strong operational performance, with broadly stable production, two new field developments and a successful gas discovery; and
- South Asia reported a 154% increase in average production from gas field developments in Pakistan and Bangladesh. A high impact exploration campaign in India will commence in Q2 2008.
Download Tullow Oil plc 2007 Final Results (PDF, 216KB, opens in a new window)
| 2007 | 2006 | Change | |
|---|---|---|---|
| Production (boepd, working interest basis) | 73,100 | 64,720 | 13% |
| Realised Oil Price per bbl (US$) | 62.7 | 52.2 | 20% |
| Realised Gas Price (pence per therm) | 37.3 | 46.2 | -19% |
| Sales Revenue ($m) | 639.2 | 578.8 | +10% |
| Operating Profit ($m) | 189.0 | 262.6 | -28% |
| Profit before Tax ($m) | 114.2 | 263.3 | -57% |
| Basic Earnings per Share (pence per share) | 7.10 | 24.23 | -71% |
| Final dividend per Share (pence per share) | 4.00 | 3.50 | +14% |
| Operating Cash Flow before Working Capital (£m) | 473.8 | 446.7 | +6% |
Outlook
- The sale of the M'Boundi field in Congo (Brazzaville) for a total cash consideration of US$435 million was announced in January 2008, with a substantial profit expected in 2008;
- A 2010 first oil date is targeted for the Jubilee field with Tullow as field Operator. The 2008 five-well appraisal programme is under way and the Eirik Raude rig has been contracted for up to five years;
- The Jubilee and Odum discoveries in Ghana have opened up new geological plays in the region and at least two exploration wells each targeting prospects with 500 million barrel upside potential are planned in the next year; and
- A major drilling campaign in the Butiaba area of the Lake Albert Rift Basin is scheduled to commence in April 2008, targeting overall reserve potential in excess of a billion barrels.
Commenting today, Aidan Heavey, Chief Executive, said:
"Exceptional exploration success, and strong production in 2007 have created an opportunity to deliver a transformational step change to our business. Our key priorities for 2008 are to appraise both the Jubliee field in Ghana and the Lake Albert Rift Basin in Uganda, while also testing the significant exploration potential of our wider portfolio. Tullow has the capability to grow substantially in the coming years and I believe we have the strategy, the assets and the team to achieve this. The outlook for 2008 and beyond is extremely promising."
Presentation, Webcast and Conference Calls:
In conjunction with these results, Tullow will conduct a presentation in London and a number of events for the financial community. Details are available on page 22 of this announcement (view the full press release in PDF) and in the 2007 Results Centre on the Group's website at www.tullowoil.com.