13th Feb 2019 08:34
LONDON (Alliance News) - Tullow Oil PLC declared its first dividend since 2015 on Wednesday, as it swung to a significant annual profit.
In November, Tullow had said it would reinstate its dividend after 18 months of "excellent operational and financial progress". The payout was suspended in early 2015 following a sharp drop in the price of oil.
Tullow declared a dividend of 4.8 US cents per share for 2018, worth USD67 million in total. From 2019 onwards, it expects any dividends, paid twice a year, to be worth at least USD100 million.
Tullow's pretax profit for 2018 was USD260.5 million, after a pretax loss in 2017 of USD285.9 million. Revenue climbed to USD1.86 billion from USD1.72 billion.
In 2017, Tullow made a USD539.1 million impairment, compared to just USD18.2 million in 2018.
Tullow's free cash flow was USD411 million, down from USD543 million a year prior. Net debt was trimmed slightly, to USD3.06 billion from USD3.47 billion.
On the operational front, the FTSE 250 company's West African oil assets did well, delivering net production of 88,200 barrels of oil per day. Adding gas, net production was 90,000 barrels of oil equivalent per day.
This last figure compares to 89,100 barrels of oil a day in 2017.
For 2019, overall oil production is guided to be 93,000 barrels of oil a day to 101,000 barrels. With gas, the figure is estimated to be between 94,000 barrels of oil equivalent a day to 102,000 barrels.
"Tullow has worked hard over the past few years to become a self-funding, cash-generating business with a robust balance sheet, low-cost assets and a rigorous focus on cost and capital discipline," said Chief Executive Paul McDade.
"This has allowed us to set a clear capital returns policy which will start with the 2018 final dividend announced today. Our high-margin producing assets in West Africa, substantial development assets in East Africa and exploration licences in industry hotspots provide Tullow with a strong foundation for growth in the years ahead."
Elsewhere, Tullow is making good progress in Kenya, looking for a final investment decision in late 2019 and first oil in 2022. It hopes to make an investment decision for Uganda mid-2019.
In Guyana, where Tullow is to focus drilling programmes in 2019, it is making progress on choosing the next target on the Orinduik block.
Tullow Oil shares were up 2.0% at 215.30 pence early Wednesday.
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