Tullow double dividend on record earnings

TULLOW Oil has doubled its interim dividend per share — to 4p — this year, on the back of a record set of first half earnings.

The Irish-founded oil and gas exploration and production company yesterday reported a 312% year-on-year rise in pre-tax profits for the first six months of 2011 and a 119% increase in revenue.

While last month’s trading update accurately predicted the record first half sales of $1.06bn (€735m), up from $486m in the first half of 2010, the pre-tax profit figure of $540m, up from $131m 12 months earlier, was new yesterday.

The sales increase was aided by rising oil and gas prices, increased production from Tullow’s headline Jubilee field asset off the Ghana coast and higher sales volumes.

Chief executive Aidan Heavey said the strong performance allowed for the doubling of the dividend for shareholders and said the company now moves into the second half of the year “with real confidence”.

Commenting on the company’s ongoing efforts to complete the farm-down, to its Chinese and French partners, of the assets in Uganda it acquired from Heritage Oil, a process which has been held up by Government red-tape, Mr Heavey said management now expects final completion of the deal next month.

“We continue to make good progress with production plans in both Ghana and Uganda, and while delays to the farm down to CNOOC and Total have been frustrating, we now expect completion in September,” he said.

The first half of this year saw Tullow increase — on a like-for-like basis — production by 35% to 75,100 barrels of oil equivalent per day (boepd) and it hopes to exceed the 100,000 boepd mark by the end of 2011.

The second half of the year will see Tullow embarking on a number of important drilling rounds. The next month should see initial drilling results from French Guiana, in South America; and Liberia in Africa — two assets Tullow’s management has earmarked as potential “game-changing” opportunities. In all, the company will drill 40 wells as part of its exploration programme over the next 12 months. This will take in Kenya, tipped to be one of the company’s next big markets.