‘New’ Tullow Oil plc (LON:TLE) chief executive Paul McDade boasted of “excellent progress” as he commented on the first full year results since his arrival in April.
Tullow reported US$1.72bn of revenue for the twelve month period, ended 31 December 2017, up from US$1.27bn in the preceding year. The company also received US$162mln of proceeds from its insurance against lost production.
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The group’s West Africa production base yielded an average of 89,100 barrels of oil per day, and the outlook for the present year sees a production range between 82,000 and 90,000 bopd.
Gross profit amounted to US$815mln, up from US$547mln, while the operating profit came in at US$22mln. Tullow made a loss of US$189mln, narrowed from US$597mln in 2016. It had positive cash flow of US$543mln, versus a US$792mln outflow a year before.
At the end of the year net debt had reduced to US$3.47bn, from US$4.7bn at the end of 2016.
Capital spending tallied US$225mln in 2017, and the company now anticipates a bigger outlay this year with US$460mln forecast (excluding US$110mln for the Uganda project which will be reimbursed via a farm-out agreement as it completes in the first half of this year).
New drilling is set to start this month, with incremental production growth targeted with wells at the Jubilee and TEN fields.
Elsewhere, the company has multiple high impact exploration campaigns planned over next three years, with the Cormorant well offshore Namibia (scheduled for H2 2018) being a notable highlight, and in Kenya the attention is turning towards the development of discoveries that were successfully appraised last year.
“Strong production and disciplined cost management has allowed us to continue to both reduce debt and invest in our high-return production assets in Ghana,” McDade said.
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“The assessment of the results from our appraisal campaign in Kenya also fully supports progress towards a major development of the South Lokichar Basin.
“As we continue to retain a keen focus on the financial discipline that has served us so well, we are now also looking to grow the value of our business both through exploration, following a full re-set of the portfolio, and through other opportunities that the recovery in the sector will present."