REG - Tullow Oil PLC - AGM Statement

Tullow OilAnnouncement

24/05/2023 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230524:nRSX4246Aa&default-theme=true

RNS Number : 4246A  Tullow Oil PLC  24 May 2023

TULLOW OIL PLC
2023 Annual General Meeting - CEO Statement

24 May 2023 - Tullow Oil plc (Tullow) issues the following statement from its
Chief Executive Officer, Rahul Dhir, ahead of its Annual General Meeting
(AGM). The meeting will take place at Tullow Oil plc, Building 9, Chiswick
Park, London, W4 5XT at 11:00 BST today. We are also enabling shareholders to
listen to the AGM as well as participate remotely. Instructions for joining
the audio cast can be found at the end of this statement or within the Notice
of Meeting
(https://www.tullowoil.com/application/files/3116/8233/9427/2023_RNS_Notice_of_Meeting_FINAL.pdf)
.

The Group will publish a Trading Statement and Operational Update on 12 July
2023.

Statement from Rahul Dhir, Chief Executive Officer, Tullow Oil plc:

"Dear Shareholders,

I would like to take the opportunity at today's Annual General Meeting to
reflect on the progress we have made since our last meeting and focus on the
conviction we have that our business is on a path from recovery to growth. We
find ourselves today at an inflection point. Strong operational and financial
performance has created a business with strong foundations that is
consistently delivering free cash flow, and concurrently, we have created a
unique platform of assets and capabilities to deliver growth and value.

2022 - a year of strong delivery

As I outlined at our 2022 Full Year results in March, it was a year of strong
business and financial performance. The cornerstone of strong performance is
always safety, and I am proud that we recorded a second successive year of
industry top quartile safety performance with no recordable incidents and no
Tier 1 or 2 process safety events during the year. Other notable milestones in
the year included:

-       Group net production of 61,120 bopd, up 6% year-on-year, leading
to free cash flow of $267 million.

-       Accelerated deleveraging to net debt to $1.9 billion, hitting
our gearing target of below 1.5x, 3 years ahead of plan.

-       Excellent drilling and completion performance enabled us to
accelerate the 2022 drill schedule and four Jubilee wells and two Enyenra
wells were brought onstream during the year.

-       Transition of operatorship to Tullow on the Jubilee FPSO is
resulting in increased uptime and lower operating costs.

-       First commercialisation of Jubilee gas in Ghana through an
interim agreement - an important step towards agreeing long-term commercial
terms for future volumes of the significant gas resource at Jubilee and TEN.

-       Delivered over $450 million to our host governments in taxes and
royalties; spent $173 million with local suppliers, supported 6,000 students
with STEM scholarships or education support.

-       Progressed our journey towards Net Zero by 2030; with work
ongoing to eliminate routine flaring in Ghana by 2025 and Letter of Intent
signed with the Ghana Forestry commission for our nature-based carbon offset
project.

Update on 2023 progress and outlook

As previously outlined, 2023 will be a year of two halves, split by the major
milestone of the Jubilee South East (JSE) project which remains on track to
come on stream around the middle of the year. This will materially step-up
production from the Jubilee field to average c.95,000 bopd in 2023 and exceed
100,000 bopd gross in the second half of the year. Our forecast capital
expenditure of $400 million is weighted to the first half of the year, with
free cash flow generation up in the second half and beyond.

The first of five Jubilee wells to be brought onstream this year, came online
in the past few days at initial rates of c.17,000 bopd, above expectations.
With three JSE producers and one injector still to come on stream, we are
confident in the production ramp-up we have outlined in the second half of the
year.

Other key updates from across the business include:

-       Net production in the first quarter of 2023 was 53,700 bopd.
Full-year Group production guidance of 58,000 - 64,000 bopd is unchanged.

-       Jubilee production in the first quarter of 2023 was net 28,100
bopd (72,700 bopd), lower largely due to reduced water injection in late 2022
and into the first quarter of 2023, which was rectified in February 2023.
Production from TEN held at 11,200 bopd net (20,300 bopd gross) and the
non-operated portfolio delivered 14,400 bopd net, in line with expectations.

-       Multi-year drilling programme in Ghana continues, with three
Jubilee wells drilled, two completed, and the third completion under way.

-       Good engagement ongoing with the Government of Ghana ahead of
the planned formal submission of an amendment to the TEN Plan of Development
(PoD) and securing a Gas Sales Agreement by mid-year. The amended TEN (PoD)
sets out a clear pathway for creating value from the TEN fields alongside the
proposed commercial agreement for the long-term supply of gas in Ghana from
the TEN and Jubilee fields. A successful outcome would result in a significant
volume of bookable gas reserves (in the range of 150-200 bcf net) on TEN.

-       Production from Gabon and Côte d'Ivoire averaged 14,400 bopd
net in the first quarter of the year, broadly in line with expectations.

-       Proactive portfolio management through a swap deal agreed with
Perenco in Gabon, enhancing Tullow's exposure to our preferred fields, and
giving greater access to future upside around existing infrastructure.

-       Increased exposure to oil price upside as hedges stepped down in
May 2023 creating c.60% upside exposure for the rest of the year.

-       Kenya Field Development Plan submitted to the Government of
Kenya and regulator, EPRA, in March; approvals, including ratification by the
parliament, expected to conclude this year.

-       Following the recent withdrawal of the Kenya Joint Venture
Partners due to differing internal strategic reasons, Tullow will have 100%
working interest in Blocks 10BB, 13T and 10BA. Taking full control creates
more optionality, gives Tullow more flexibility in the ongoing process to
secure strategic partners, creates a simpler Joint Venture Partnership and
streamlines project delivery.  Detailed farm-out discussions continue with a
number of companies we remain focused on securing a strategic partnership this
year.

-       Two disputed Ghanaian tax assessments filed for arbitration with
International Chamber of Commerce in London in February 2023. We believe these
assessments are without merit and we have high confidence in the strength of
our cases. Despite taking this formal step to resolution, engagement with the
Government of Ghana, including the GRA, continues with the aim of resolving
these disputes on a mutually acceptable basis.

Changes to our Board

Jeremy Wilson retired from the Tullow Board in November following nine years
of service. Mike Daly will have also served nine years at the end of this
month and will step down following this AGM. I am grateful for both Jeremy and
Mike's guidance during the last three years.

Richard Miller was confirmed as Chief Financial Officer (CFO), having already
made a significant contribution to Tullow during his tenure as Interim CFO.
Richard continues to make a significant impact as we work to deliver our
business plan.

We have also appointed a new independent non-executive Director of Tullow in
Roald Goethe who joined us earlier this year. As a long-term supporter and
shareholder of Tullow, Roald is familiar with Tullow's strategy and aligned
with our commitments as a trusted partner to our host nations. He also brings
a deep understanding of the oil and gas industry in Africa with an
entrepreneurial perspective.

Material near-term catalysts to unlock value

The Board remains confident that the business plan we have laid out will
continue to deliver growth and unlock value, including:

-       Increasing gross Jubilee production to over 100,000 bopd, while
keeping relentless focus on production from the remainder of our fields, will
transform our cash flow generation starting in the second half of this year.

-       A long-term gas supply agreement with the Government of Ghana
for indigenous gas will not only enhance energy security and facilitate
industrial development in Ghana, but also unlock another revenue stream for
Tullow and the Joint Venture Partnership from the substantial gas resource
base both at Jubilee and TEN.

-       Kenya holds the potential to add material reserves and create
value for Kenya and our shareholders in the longer term, for minimal capex
outlay today.

-       Implementing our infrastructure-led exploration strategy to
maximise value around our producing assets in West Africa, where we have a
deep subsurface understanding, and access to infrastructure enables rapid
development of discoveries. We also retain material positions in the emerging
basins of Guyana and Argentina, where we continue to seek opportunities to
unlock value from the significant resource base.

We continue to progress a range of options to address our debt maturities and
position the business for a successful refinancing. We are on track to deliver
in excess $800 million of free cash flow at $80/bbl in the period 2023-2025.
This will enable us to reach our goal of being a low debt business with cash
gearing of 1x or below and provide us with the financial flexibility to pursue
value accretive opportunities or consider future shareholder returns.

I would like to thank our investors, host nations and host communities for
your support and look forward to continuing this journey together to drive
material value creation for all stakeholders."

Rahul Dhir, Chief Executive Officer, Tullow Oil plc

 

AGM AUDIO CAST

11:00am (BST)

This year, we are enabling shareholders to listen to a live audio cast of the
AGM as well as participate remotely.

In order to participate at the meeting, you will need to visit
http://www.meetnow.global/TULLAGM2023 (http://www.meetnow.global/TULLAGM2023)
on your device operating a compatible browser using the latest version of
Chrome, Firefox, Edge or Safari. Please note that Internet Explorer is not
supported. It is highly recommended that you check your system capabilities in
advance of the meeting day.

If you are a shareholder, you can use your unique Shareholder Reference Number
and PIN as displayed on your Form of Proxy/Attendance Card. If you are an
appointed proxy or a corporate representative you will have had to be provided
with a unique invite code to enter the meeting and exercise your rights. These
credentials will be issued one working day prior to the meeting, conditional
on evidence of your proxy appointment or corporate representative appointment
having been received and accepted. If you have not been provided with your
meeting access credentials, please ensure you contact Computershare on the
morning of the meeting, but no later than one hour before the start of the
meeting.

Access to the meeting via http://www.meetnow.global/TULLAGM2023
(http://www.meetnow.global/TULLAGM2023) will be available from 10.00am. During
the meeting, you must ensure you are connected to the internet at all times in
order to vote when the Chair commences polling on Resolutions being put to the
meeting. Therefore, it is your responsibility to ensure connectivity for the
duration of the meeting.

Technical issues

If you experience any technical issues with the site you may either call our
Registrar on the telephone number provided on the site or once you have
entered the meeting, you can raise your question using the chat function. If
you have technical issues prior to the start of the meeting you should contact
our Registrar on the shareholder helpline.

Process

The process of asking questions and accessing the AGM audio casting will be
further explained within the application and located on the information page.

 CONTACTS
 Tullow Oil plc       Camarco

 (London)             (London)

 (+44 20 3249 9000)   (+44 20 3781 9244)

 Nicola Rogers        Billy Clegg

 Matthew Evans        Georgia Edmonds

                      Rebecca Waterworth

Notes to editors

Tullow is an independent oil & gas, exploration and production group which
is quoted on the London, Irish and Ghanaian stock exchanges (symbol: TLW) and
is a constituent of the FTSE250 index. The Group has interests in over 30
exploration and production licences across eight countries. In March 2021,
Tullow committed to becoming Net Zero on its Scope 1 and 2 emissions by 2030.

For further information, please refer to our website at www.tullowoil.com.

Follow Tullow on:

Twitter: www.twitter.com/TullowOilplc (http://www.twitter.com/TullowOilplc)

YouTube: www.youtube.com/TullowOilplc (http://www.youtube.com/TullowOilplc)

Facebook: www.facebook.com/TullowOilplc (http://www.facebook.com/TullowOilplc)

LinkedIn: www.linkedin.com/company/Tullow-Oil
(http://www.linkedin.com/company/Tullow-Oil)

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  AGMZZGZKMFVGFZZ