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Tullow Oils posts loss of $1.2bn on the back of exploration write-offs and charges


A Tullow drilling rig

A Tullow drilling rig

A Tullow drilling rig

Tullow Oil has said it made a loss after tax of $1.2bn in respect of last year.

The loss was driven by non-cash exploration write-offs and impairments, according to annual results from the company.

Revenue at the Irish-founded group fell to $1.4bn in 2020, from $1.7bn in 2019.

During the year Tullow’s working interest production averaged 74,900 barrels of oil per day, in line with expectations.

The company had net debt at year-end of around $2.4bn.

As part of its ongoing refinancing discussions, Tullow said it has now received approval for a new debt capacity amount under the Reserve Based Lending facility of $1.7bn. It now has liquidity headroom and free cash of around $900m.

Tullow said the combination of “strong business delivery, increased liquidity, recent asset sales and higher commodity prices is providing a positive impetus to constructive discussions with creditors.”

It added that it is “confident” a mutually satisfactory agreement on debt refinancing can be reached in the first half of this year.

In November Tullow sold its Ugandan asset to Total for $575m, with $75m of a contingent payment expected this year.

Tullow had underlying operating cash flow of $598m last year.

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The company said its working interest oil production in the year-to-date is “in line with expectations.”

Tullow, which intends to focus over 90pc of its capital on West African producing assets, said its full year production guidance for 2021 is for 60,000 – 66,000 barrels of oil per day.

The group plans capital expenditure of around $265m in 2021.

Underlying operating cash flow this year is expected to be approximately $500m.

Rahul Dhir, CEO of Tullow Oil, said: “After a year of significant change for Tullow, we are now executing a robust, cash generative business plan which is focused on our most productive assets.”

“We will start a multi-year, multi-well drilling programme in Ghana next month to deliver sustainable and profitable production growth.”

Tullow also today said it intends to be Net Zero on its Scope one and two emissions by 2030 as part of its commitment to sustainability.

In mining news, Kenmare Resources, which is focused on the Moma Titanium Minerals Mine in Mozambique, has said a number of Covid-19 cases is limiting the availability of its workforce at the site.

The business is being managed to mitigate the impact and production has continued at normal levels, according to a statement from the group.

Kenmare said it will provide a further update with the release of its 2020 preliminary results on March 24.

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