13th Jan 2016 07:46
LONDON (Alliance News) - Tullow Oil PLC Wednesday said revenue and gross profit in 2015 is set to come in considerably lower than a year earlier as lower oil prices and lower production from Europe offset a small rise in production from its main asset in West Africa.
The West African oil producer said revenue for 2015 is set to total USD1.60 billion, yielding a USD600.0 million gross profit and generating USD1.00 billion of pre-tax operating cashflow before working capital.
That is a huge fall from the USD2.21 billion of revenue generated in 2014, with gross profit dropping from USD1.09 billion and pretax operating cashflow falling from USD1.54 billion, as lower oil prices and a decrease in production from Europe offset a rise in production from its assets in West Africa.
Net production from West Africa in 2015 averaged 66,600 barrels of oil per day, rising from 63,400 barrels a day a year earlier, sitting within its guidance range of 63,000 to 68,000 barrels set at the end of 2014.
Net production from Europe dramatically fell to 6,800 barrels of oil equivalent per day in 2015 from 11,800 barrels of oil equivalent per day in 2014.
Tullow's realised post-hedge oil price in 2015 averaged USD68 a barrel, significantly down from USD97.5 per barrel in 2014.
The company also provided an update on the TEN project in Ghana, which is now 80% complete and on track to begin producing oil between July and August this year. That will help Tullow push production up to around 73,000 to 80,000 barrels per day in 2016. European production is expected to be in the range of 5,000 to 7,000 barrels a day this year.
Tullow's aim is to be producing 100,000 barrels of oil per day in 2017.
The oil company plans to book around USD1.45 billion in exploration write-offs and impairments in 2015, which was less than in 2014.
Moving forward, Tullow plans to reduce capital expenditure in 2016 as expected, to only USD1.10 billion from the USD1.70 billion spent in 2015, of which around 90% will be spent on development rather than exploration.
Net debt at the end of 2015 stood at USD4.00 billion, a large rise from only USD3.10 billion at the end of 2014.
"We continue to focus on driving down our costs and capital expenditure and, at the beginning of 2016, Tullow has a mark-to-market hedge value of over USD600.0 million and financial headroom of USD1.90 billion. Accordingly, we have a diversified balance sheet which supports our planned activities for the year ahead," said Chief Executive Aidan Heavey.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Tullow Oil