Tullow Oil is an independent oil and gas, exploration and production group, quoted on the London and Ghana stock exchanges. The company is a constituent of the FTSE250 and has a market capitalisation of approximately £420 million.
2022 Full Year Results were published on 8 March and we were delighted to have Rahul Dhir, Chief Executive Officer and Richard Miller, Chief Financial Officer report on performance and look ahead to the prospects for 2023. A recording of the webinar is available here.
Rahul started the presentation by stating that when he joined the company in 2020 he had conviction in the assets and the belief that with focus and discipline they could be turned around and unlock the underlying value. Roll forward three years and the company is creating value, generating free cash flow and has a much stronger balance sheet. Operationally they have delivered a top quartile safety performance for the second consecutive year, they are delivering economic prosperity to their host nations and they have an energised organisation. 2023 should be an exciting year for Tullow as the results of the strategy become more visible. The Jubilee field is expected to exceed 100kboepd and free cash generation should accelerate in the second half of the year which will result in debt being paid down further and additional equity value accretion.
In addition, there are some very important catalysts which will create further value for the company including: Long term gas sales agreement in Ghana; submission of a revised plan of development for TEN, the approval of the field development plan for Kenya, as well as the monetisation of the very large prospective resource base.
Tullow reported strong operational and financial performance in 2022 with progress on many metrics including high uptime. Production rose 6% on a LFL basis to 61.1 kboepd and these were sold at an average price of $88/bbl. Revenues rose 39% to $1,783m, after a $319m pay out under the hedge program. The continued focus on costs has enabled the company to keep operating costs flat and further reduce G&A. The company reported a profit of $49m and free cash flow improved by 9% to $267m. The company continued to invest in the asset base increasing capex by almost $100m to $354m. The majority of capex is allocated to near term producing opportunities. The company also invested $126m in the Ghana pre-emption option…
