Production gain helps Tullow to second year of record growth

A 35% increase in production levels helped Tullow Oil achieve a second consecutive year of record financial growth in 2011.

As already flagged by the Irish-founded exploration company, sales revenues soared 111% — from $1.09bn (€828m) to $2.3bn — but pre-tax profit was also up massively, from $179m in 2010 to $1.07bn last year.

Tullow’s production grew from 58,100 barrels of oil equivalent per day (boepd) to 78,200 boepd and management is hopeful production, for 2012, will come in at somewhere between 78,000 and 86,000 boepd. The company has also doubled its full-year dividend per share to 12c. Basic earnings per share last year grew by 795%, from 8.1c to 72.5c.

Chief executive Aidan Heavey said yesterday the first full year of production at its Jubilee well in Ghana, the eventual farm-down of some of its key Ugandan assets to its developmental partners, and the financial results provided “further landmarks” in the company’s evolution.

“We’ll continue to execute our industry-leading exploration programme, appraise major discoveries and invest in key development projects in Ghana and Uganda,” he said. “Tullow now has a very strong balance sheet and increased cash flow, which gives us real flexibility and a firm foundation for further growth.”

Ghana and Uganda will continue to take up most of Tullow’s time and money this year, but it will also be looking at early-stage development of some of its assets in French Guiana, Liberia, Kenya and elsewhere.

Management also mentioned assets in Mauritania and Senegal, where Tullow has a “commanding” acreage position. “In-depth geological studies of new plays has positioned Tullow to ‘move the needle’ should there be any basin-opening discoveries,” it added.

Mr Heavey said that, with many opportunities for growth, 2012 “promises to be another excellent year for Tullow”.

He added that Tullow’s growth, on the back of the last two years of strong financial and operational growth, will see it partnering more with the exploration divisions of the industry’s “super-major companies”.

Tullow is already partnering the likes of CNOOC and Total in Uganda and, in January, signed a non-binding agreement with Shell to explore in select frontier basins and geological plays in the Atlantic Basin.