7th Aug 2024 13:46
(Alliance News) - Tullow Oil PLC on Wednesday reported considerable profit growth in the first half of 2024, despite lower revenue, as the company continues to reduce debt and scale back capital expenditure.
The London-based oil & gas exploration and production company said pretax profit jumped 69% to USD367.6 million in the six months that ended June 30 from USD217.2 million the previous year.
Revenue declined 2.3% to USD758.8 million from USD776.9 million, but cost of sales was reduced by 30% to USD299.2 million from USD425.6 million and Tullow gained USD38.9 million in asset revaluations.
Sales volumes fell 10% to 51,200 barrels of oil equivalent per day from 56,900. Offsetting this, the realised oil price increased 6.0% to USD77.7 from USD73.3 per barrel.
Net debt was paid down to USD1.7 billion from USD1.9 billion, with Tullow retaining liquidity headroom of USD700 million.
Group working interest production was at 63,700 barrels of oil equivalent per day, ahead of guidance of 62,000.
Chief Executive Officer Rahul Dhir said: "Tullow has continued to deliver strong operational and financial performance. We are pleased to report improved results across key financial metrics compared to the first half of 2023; with higher production and oil price realisations combined with lower expenditure.
"We now progress into a period of lower capex in the second half of the year and beyond. We will continue to reduce debt through sustainable free cash flow generation, strengthening our balance sheet and providing optionality for investment, growth and future returns."
Capex in the half-year was USD157 million, down 16% from USD187 million last year.
The company lowered its capex guidance for the full year to USD230 million from USD250 million previously.
Tullow anticipates a "significant free cash flow uplift" in the second half, even though full year production is expected to be at the lower end of the 62,000 to 68,000 boepd range, similar to 62,700 boepd recorded in 2023.
"Tullow remains focused on deleveraging and reaching net debt of less than USD1 billion and cash gearing of less than 1x in the near term," Tullow said.
Tullow Oil shares were up 2.5% to 28.14 pence each in London on Wednesday afternoon.
By Elijah Dale, Alliance News reporter
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