Half-year pre-tax profits at Tullow jump 150% to $131m

PRE-tax profits at Tullow Oil jumped by over 150%, on a year-on-year basis, to $131 million (€103.5m), in the first half of the year.

The Irish-founded oil and gas exploration company’s first set of US dollar presented results also showed an 11% increase in revenue to $486m, a 35% rise in operating profit to $124m and a 5.4c rise in earnings per share to 9.4c.

Tullow chief executive, Aidan Heavey called the performance “solid” and “fundamentally ahead of expectations”.

Half-year production figures — 55,800 barrels of oil equivalent per day (boepd) — were down 6% on a year-on-year basis, but full-year forecasts (of up to 58,000 boepd) are set for a marginal increase.

Part of that increase will be down to a small initial contribution from Tullow’s biggest asset, the Jubilee field in Ghana, which remains on schedule for first oil production by the end of this year and should significantly boost both production and the company’s balance sheet next year.

Production rates, by the end of next year, should amount to between 90,000 and 100,000 boepd.

“We continued to make strong progress in the first half of 2010; our exploration and development programmes are delivering excellent results with significant new oil discoveries being made in both Ghana and Uganda,” said Mr Heavey.

Production from Tullow’s Ugandan operations is still likely in 2011/12, with the planned farm-down of the recently-acquired Heritage Oil assets to CNOOC and Total likely to be completed soon and Heritage’s capital gains tax dispute with the Ugandan government not likely to delay things.

Tullow also, yesterday, announced the appointment of Ghana native, Tutu Agyare, as a non-executive director. Further non-executive additions to the board are expected, while Tullow is due to take an additional share listing in Uganda in October and Ghana later in the year.

Total capital expenditure this year will amount to $1.5bn covering an ongoing aggressive drilling round, which will also look at the company’s assets in South America.