Heavily Indebted Tullow Oil Reports First Net Income in Five Years

Tullow Oil, the oil and gas explorer focused on Africa, declared its first dividend since the oil price plummeted in 2014, recording its first net profit in five years.

The group listed on the London Stock Exchange, which suspended payments to shareholders in 2015, announced that it will pay a final dividend of 4.8 cents per share in May, for a total of $ 67 million. It has already committed to distribute at least $ 100 million to shareholders each year starting in 2019.

Tullow returned to profit with a net full year of $ 85 million, after a loss of $ 175 million in 2017, on revenues of $ 1.9 billion, against $ 1.7 billion. It generated pre-tax income of $ 261 million, compared with a loss of $ 286 million in 2017.

Like many other so-called independent explorers and oil producers, Tullow was a victim of the 2014 stock market crash and took on heavy debts while she was committed to developing strong projects. capital intensity.

Tullow still has $ 3.1 billion in debt, down from nearly $ 3.5 billion in 2017.

Paul McDade, who took office as general manager in 2017, said the company has been working hard over the last three years to cope with its balance sheet and cut costs. His efforts to reduce the debt burden included a $ 750 million shareholder injection in 2017.

"Tullow has worked hard in recent years to become a self-sustaining, cash-generating business with a strong balance sheet, low-cost badets and a focus on disciplined cost and capital discipline," he said. Mr. McDade.

Last year, Tullow took advantage of the average oil price for its production of $ 68.5 per barrel, up from $ 58.3 per barrel the previous year. 88,200 barrels of oil per day, compared with 89,100 barrels / day in 2017. Tullow announced plans to increase production this year to 93,000-101,000 barrels / day.

Tullow plans to make the final investment decisions this year on projects in Kenya and Uganda.

The Ugandan project was at the center of a tax dispute with the country's authorities after Tullow reached an agreement to sell a stake in the project to the French company Total and the Chinese company Cnooc. The $ 900-million deal was delayed by the dispute over the amount of tax payable, but Tullow said on Wednesday he accepted "the principles" on the amount of capital gains tax to pay.