Tullow Oil has seen its profit after tax come in at $70m in the first half of 2023, well below the $264m figure it posted for the first six months of 2022.
First-half production averaged 53.5 kbopd, and the company decided to lower its full-year oil production guidance to 58-60 kbopd from the previous guidance of 58-64 kbopd .
The reduction was driven by Jubilee’s first-half performance being slightly below expectations and the timing of Jubilee South East’s launch in the second half of the year, Tullow noted. Year-round gas production in Ghana is expected to average 7 kboepd.
“We are at an important turning point in the evolution of our business plan,” commented Rahul Dhir, CEO of Tullow.
“Over the past two and a half years we have focused relentlessly on capital discipline, operating performance and the right investment in our assets. This has resulted in a much improved business, a reduction in material debt and, most recently , the delivery of Jubilee South East, which has substantially increased production,” he added.
“We are now shifting into harvesting mode as our business will generate $800 million of free cash flow between 2023 and 2025, while continuing to run our business with the same discipline. This will allow us to further reduce plus our debt, establish a sustainable capital structure and grow our business to create value for our investors, host countries and employees,” continued Dhir.
Tullow said its net debt for the first six months is currently $1.93 billion, down from $2.33 billion reported in the first half of 2022. The company expects to further reduce its net debt by the end of year up to 1.7 billion dollars.
The company added in its report that during the period under review, its net sales were 56,900 boepd, up from 53,500 boepd in the first half of 2022. The increase is mainly due to an additional increase in the first half of 2023 in Gabon compared to the first six months of 2022, where an incident at the Cap López terminal had delayed an uprising, Tullow revealed.
The group’s realized oil price after hedging during the period was $73.3/bbl and before hedging $79.7/bbl, which compares with $86.3/bbl and 106 .9 $/bbl in the first half of 2022, respectively. Lower oil prices compared to the first half of 2022 have resulted in a lower hedge loss that has decreased total revenue by $65.9 million in the first half of 2023, Tullow said.
The company reported revenue of $777 million, down from $859 million in the first half of 2022.
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