Tullow Oil returns to net profit and resumes dividend

(Reuters) – Tullow Oil, which is focused on Africa, announced Wednesday its first annual net profit in five years and announced plans to recover dividends with a dividend of 4.8 cents per share, in anticipation of East African projects and drilling in Guyana.

As announced in November, Tullow will provide at least $ 100 million to shareholders starting this year, while reducing its debt by $ 3.1 billion and increasing its expenses to $ 570 million.

The bulk of this money will help increase production in Ghana, which will allow Tullow to increase production to 90,000 barrels of oil equivalent per day (boed) this year, compared to 90,000 boed.

Tullow achieved after-tax profit of $ 85 million on a $ 1.9 billion business last year, supported by rising oil prices and cost discipline.

A payment of $ 208 million after the sale of a stake in Total to its onshore fields in Uganda was delayed last year because the country had requested more tax than expected on the transaction .

Tullow said on Wednesday that he was now agreed on the principles of the tax deal. CEO Paul McDade told Reuters that he plans to pay less than the $ 167 million originally requested by the government, which would pave the way for the final launch of his Ugandan project in mid-April. 39; year.

Barclays badysts said in a note that they expected a tax payment of about $ 85 million.

"Placed next to the announced dividend payment (…), we believe that the initial tax deal in Uganda is a positive update and that the shares should outperform the sector today," said JP Morgan in a note.

In Kenya, Tullow reiterated that a final investment decision would be made by the end of the year.

The first steps to be taken include the commercial and financial agreements for two pipelines to transport oil from onshore deposits to the coast of the Indian Ocean.

In Uganda, Tullow plans to finalize commercial and land deals in the first half of the year.

In Kenya, Tullow expects government business framework agreements and plans to acquire land for 800 km pipeline and oilfield infrastructure in the first quarter.

In Guyana, Tullow plans to drill the Jethro prospect in the second quarter as the first of two planned wells on the Orinduik block.

The company has covered just under 60,000 bpb for 2019 at a floor price of $ 56.24 per barrel and 25,000 bpd of its production for 2020 at $ 59.00 per barrel.

For a graph on Tullow's results, see – tmsnrt.rs/2TLfFDZ