Tullow Oil posts gross profit of $321 million in 2021 half year results
International Oil Company (IOC), Tullow Oil Plc, for the first half of this year has posted a gross profit of $321 million.
The IOC per its financial results for H1 2021, recorded total revenue of $727 million and a profit after tax of $93 million.
Capital investments and decommissioning costs for the half year amounted to $101 million and $37 million respectively.
Half year operating costs, the oil major further noted, averaged $12.9/bbl, a year-on-year increase primarily due to lower production and increased costs related to extended COVID-19 operating procedures.
According to Tullow, its group working interest production for the first half of 2021 averaged 61,230 boepd, in line with expectations.
Adding that it witnessed good operational progress in Ghana with FPSOs delivering over 98% uptime and sustained increased water injection and gas offtake rates.
The oil firm also noted that its first new well drilling programme, the J56 producer in Ghana came on stream delivering production rates ahead of expectations.
Speaking on the half year results Rahul Dhir, Chief Executive Officer, Tullow Oil Plc said, “Strong operational performance in the first half of the year and a transformational debt refinancing have put Tullow on a firm footing to deliver our Business Plan. Our West Africa production assets have performed well, and we are narrowing production guidance for 2021 to the upper end of the range. In Kenya, the revised development plan creates a robust project that has the potential to deliver material value to the Government of Kenya and other stakeholders.”
“Through our operations, Tullow continues to deliver Shared Prosperity and to be an engine for economic and social change in the developing economies in which we work. Furthermore, by targeting Net Zero by 2030 and an emphasis on responsible operations, we are ensuring that the oil and gas resources of our host countries are developed efficiently and safely, whilst minimising our environmental impact.”
Jubilee
Gross production from the Jubilee field averaged c.70,600 bopd (net: c.25,100 bopd) in the first half of the year, slightly ahead of expectations due to good facility uptime and well performance. Full year guidance for Jubilee has been slightly adjusted upwards to c.74,300 bopd (net: c.26,400 bopd) following the decision to move the planned maintenance shut-down into the first half of 2022.
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Shifting the shutdown by approximately six months is expected to maximise the amount of work achievable as gas enhancement works planned for 2023 can be brought forward and an expected easing in COVID-19 restrictions will allow for a more efficient work programme to be carried out in the planned shutdown period.
TEN
Gross production from the TEN fields averaged c.37,000 bopd (net: c.17,400 bopd) in the first half of the year. This is broadly in line with expectations. Full year gross production from TEN is expected to be c.33,200 bopd (net: c.15,700 bopd) reflecting the underlying decline in the field during the year.
Drilling of the Ntomme gas injector well (Nt-06) reached total depth this month with completion expected to be finished in October. When tied in later this year, the well is expected to mitigate against further decline and keep production broadly flat into 2022.
2021 FIRST HALF RESULTS SUMMARY
- Group working interest production for the first half of 2021 averaged 61,230 boepd, in line with expectations.
- Good operational progress in Ghana; FPSOs delivering over 98% uptime; sustained increased water injection and gas offtake rates; first new well in drilling programme, J56 producer, came on stream delivering production rates ahead of expectations.
- Progress made on the delivery of Business Plan set out in November 2020, including target to become Net Zero by 2030.
- Revenue of $727 million; gross profit of $321 million; profit after tax of $93 million; underlying operating cash flow of $218 million and free cash flow of $86 million. Continued focus on costs results in reduced administrative expenses of $23 million in 1H21, down c.50% year-on-year.
- Capital investment of $101 million; decommissioning costs of $37 million. 1H21 operating costs averaged $12.9/bbl, a year-on-year increase primarily due to lower production and increased costs related to extended COVID-19 operating procedures.
- Net debt at 30 June 2021 of c.$2.3 billion; Gearing of 2.6x net debt/EBITDAX; liquidity headroom and free cash of $0.7 billion.
- Completion of comprehensive debt refinancing with $1.8 billion of five-year Senior Secured Notes issued and a new $500 million revolving credit facility.
- Completion of Equatorial Guinea and Dussafu Marin permit sales in March and June respectively, receiving $133 million.
