Tullow Oil announces its Full 2020 Results

Tullow Oil plc, announced its Full Year Results for the year ended 31 December 2020.

2020 Full Year Results Summary

  • · Group working interest production averaged 74,900 bopd, in line with expectations
  • · Revenue of $1,396 million; gross profit of $403 million; loss after tax of $1,222 million
  • · Loss after tax driven by non-cash exploration write-offs and impairments totalling $1,237 million pre-tax
  • · Underlying operating cash flow of $598 million2 and pre-financing cash flow of $625 million2
  • · Capital and decommissioning expenditure were $288 million2 and $58 million respectively
  • · Net debt at year-end of c.$2.4 billion2; gearing of 3.0×2 net debt/EBITDAX; headroom and free cash of c.$1.1 billion
  • · Strong operational performance in Ghana; both FPSOs delivered in excess of 95% uptime during the year
  • · $575 million Uganda asset sale to Total completed in November 2020; $75 million contingent payment expected in 2021

    · 10-year business plan presented at a Capital Markets Day on 25 November 2020 (CMD) to deliver material value and cash flow
  • · Business plan to generate c.$7 billion underlying operating cash flow and c.$4 billion pre-financing cash flow @ $55/bbl
  • · Material upside to oil price with business plan generating an additional $1.5 billion of pre-financing cash flow @ $65/bbl
  • · Over 90% of capital to focus on West African producing assets; options being worked to unlock value in Kenya and South America
  • · Cost focus is delivering annual savings of >$125 million through 53% headcount reduction, outsourcing and other efficiencies
  • · A strong foundation has been created to address near-term debt maturities and reduce gearing to 1-2x net debt/EBITDAX
  • · 2P reserves increased to 260 mmboe representing a 2020 reserves replacement ratio of c.160%, underpinning the business plan

Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented :

“After a year of significant change for Tullow, we are now executing a robust, cash generative business plan which is focused on our most productive assets. We have transformed our cost base, implemented rigorous capital discipline and are well placed to benefit from higher oil prices. We will start a multi-year, multi-well drilling programme in Ghana next month to deliver sustainable and profitable production growth. Our self-help initiatives will deliver c.$1 billion, including over $700 million from asset sales in the past year. Strong business delivery, increased liquidity and improving commodity prices support constructive refinancing discussions. Importantly, we are also announcing today that we intend to be Net Zero by 2030 as part of our commitment to sustainability. This commitment is in line with our desire to work closely with Host Communities and Governments and our investors to deliver a long-term and sustainable business.”

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