Business Irish

Monday 15 July 2019

Tullow makes 'steady progress' as it expects half year profit of $500m

Tullow Oil CEO Paul McDade. Photo: Bloomberg
Tullow Oil CEO Paul McDade. Photo: Bloomberg
Ellie Donnelly

Ellie Donnelly

Tullow Oil has reported "steady progress" across all of its business in the six months to 30 June.

In a trading update before it releases its half year results next month, the Dublin-listed group said its balance sheet “remains strong” and that it expects another year of “solid free cash flow generation.”

The group is expected to report revenue of $900m (€790m) for the first six months of this year, and gross profit of around $500m (€439m).

However in Kenya, Government delays in both acquiring land and securing water rights are taking longer than originally forecast.

On the back of this, Tullow has reviewed its timeline, and a final investment decision (FID) is now expected to be made in 2020. The group had previously expected to make the decision in 2019.

Meanwhile in Uganda negotiations with respect to the tax treatment of the group's farm-out agreement with CNOOC and Total have not been finalised.

Tullow said it is currently considering all options in pursuing the sale of its interests in Uganda.

Paul McDade, CEO of Tullow, said: "Tullow has made steady progress overall across the business in the first half of the year.”

“Our balance sheet remains strong and we expect another year of solid free cash flow generation. I am particularly pleased with the significant progress we have made in Kenya and the agreement with the Government over a number of key commercial principles will greatly assist us in driving the project to FID.”

Tullow said first half production will be around 89,000 barrels of oil per day.

It is holding full year production guidance at 90,000-98,000 barrels of oil per day.

Meanwhile, the group’s “potentially material” drilling campaign in Guyana will get underway later this month with the start of drilling of the first of three wells planned for 2019.

The group is due to release its half year results of July 24.

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