Tullow Oil bounces back with $49m profit in 2022 after $81m loss in 2021
Tullow Oil, the multinational oil and gas exploration company, has reported a significant turnaround in its financial performance for 2022, bouncing back from a loss position the previous year to record a profit of $49 million.
According to data published by the company, gross profit for the year reached $1.086 billion, compared to $647 million in 2021. Additionally, revenue increased by 40% to $1.7 billion, which included the hedge cost of $319 million.
Tullow Oil CEO, Rahul Dhir, attributed the impressive performance to a “high focus on cost control and a disciplined approach to operational efficiency”, which helped drive strong performance across the group. He added that the company was able to deliver free cash flow of $267 million, lowering net debt to $1.9 billion and reducing cash gearing to 1.3x net debt to EBITDAX.
Looking ahead, Mr. Dhir announced that Tullow Oil had “multiple catalysts to deliver further profitable growth” and highlighted that momentum was building across the company’s portfolio. The commissioning of Jubilee South East is on track for the second half of 2023, with the aim of bringing undeveloped reserves online and Jubilee gross production to more than 100 kbopd before the end of the year. In addition, Tullow Oil is preparing a plan of development to monetize the remaining resources at TEN.
The company’s operations on Jubilee and TEN oil fields were also a contributing factor to its success in 2022. Production from the Jubilee Oilfield increased from an average of 74.9 kbopd in 2021 to 83.6 kbopd in 2022, with two wells drilled in the Jubilee South East area in the second half of the year, and a third in January 2023. The wells are set to commence production in the second half of the year after the installation and tie-in to the Jubilee South East Project subsea infrastructure.
The completion of the Jubilee South East Project will mark the end of the current major infrastructure spend in the Jubilee area, with the majority of near-term capex expected to be focused on drilling and completing new wells. Production from the TEN fields averaged 23.6 kbopd in 2022, with overall production at the lower end of guidance. Tullow clarified that no new wells were brought online during the year at Ntomme, but pressure support from existing gas and water injection wells resulted in steady production.
Looking to the future, Tullow Oil expects gross production from Jubilee to increase to over 100 kbopd, with four new wells at Jubilee South East and a further Jubilee producer onstream later this year. The company is forecasting capital expenditure of $400 million, with Ghana accounting for a significant portion of this spend.
Overall, Tullow Oil’s strong financial performance in 2022 is testament to the company’s focus on cost control, operational efficiency, and commitment to driving profitable growth. With multiple catalysts on the horizon and a unique platform of assets and capabilities, Tullow Oil is well-positioned to create significant value for its stakeholders in the years to come.
