Tullow Oil has released its half-year results for 2023, revealing revenue amounting to US$777 million, a gross profit of US$351 million, and a profit after tax of US$70 million.
The company said the highlight of the period was its successful start-up of the Jubilee Southeast project, signifying a significant increase in production and free cash flow. Its strategic business plan remains on course to generate approximately US$800 million in free cash flow between 2023 and 2025.
Rahul Dhir, Tullow’s Chief Executive Officer, shared his perspective on the company’s progress, stating, “We are at an important inflection point in the evolution of our business plan. For the last two and a half years we have relentlessly focused on capital discipline, operational performance and appropriate investment in our assets. This has resulted in a much-improved business, material debt reduction and most recently, the delivery of Jubilee South East which has substantially increased production.”
In addition to the financial achievements, Tullow also reported several key operational milestones, including strong safety performance and the commercialisation of Ghana gas through interim gas sales agreements.
Tullow’s capital expenditure guidance remains unchanged at approximately US$400 million, with decommissioning costs of around US$70 million, it said.
Furthermore, Tullow expects to generate significant free cash flow in the second half, with approximately US$200 million generated at US$80/bbl. This outlook aligns with the company’s unchanged full-year free cash flow guidance of approximately US$100 million at $80/bbl.
The company recently decided to offload its 60% operating stake in Guyana’s Orinduik Block by selling its subsidiary, Tullow Guyana B.V., to Eco subsidiary, Eco Guyana Oil and Gas (Barbados) Limited. Two heavy oil discoveries were made at Orinduik in 2019, but so far deemed non-commercial situated close to Exxon’s prolific Stabroek Block. The transition to Eco Atlantic is now set in motion, with intricate financial arrangements including an immediate cash payment and potential future earnings for Tullow based on milestones in exploration and production.
Eco will become operator, with a 75% stake, while a joint venture of TotalEnergies and Qatar Petroleum (TOQAP) holds the remaining 25%.
