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Tullow Oil releases 2015 full year results

Published by
Oilfield Technology,


  • 2015 revenue of US$1.6 billion and pre-tax operating cash flow of US$1.0 billion.
  • TEN Project over 85% complete and on track for first oil between July and August 2016.
  • Action being taken to reduce 1.1 billion 2016 capex; Ability to reduce to US$0.3 billion from 2017.

  • Aidan Heavy, Chief Executive, said:

    “Today’s results demonstrate that Tullow adjusted well to low oil prices in 2015. We secured current and future cash flow through good operational delivery in West Africa, continued to build our resource base in East Africa, significantly cut costs across the Group and benefitted from our strong hedging position. Our challenge in 2016 is to be equally robust in responding to the uncertainties that remain in the sector. In the year ahead, we have three key priorities: ensuring continued low cost production from West Africa - including the start-up of production from TEN between July and August 2016; driving further reductions in operating costs and capital expenditure; and focusing on deleveraging the balance sheet through free cash flow generation and strategic portfolio management. As we look ahead, we have a portfolio of world class, low cost oil assets which will produce around 100 000 bpd in 2017 and a major position in one of the world’s newest, low cost, oil provinces in East Africa, both enabling us to create substantial value.”

    2015 Full year results summary

  • Revenues down 27% on previous year; write-offs and impairment charges also impacted by the oil price decline, resulting in a loss after tax of US$1.0 billion. Strong operating cash flow generation of US$1.0 billion from stable production.
  • Year-end 2015 net debt of US$4.0 billion with significant facility headroom and free cash of US$1.9 billion. RBL and RCF capacity increased by US$450 million in March 2015; banking discussions with regard to March 2016 re-determination have begun.
  • Mark-to-market value of oil hedges at 31 January 2016 of US$668 million with 52% of 2016 entitlement oil production hedged at average floor price of around US$75/bbl on a pre-tax basis (64% hedged on a post-tax basis); material 2017 hedging in place.
  • Major Simplification Project completed resulting in improved organisational structure, efficient processes and reduced headcount of 37%; on track to deliver cash savings of around US$500 million over three year period.
  • Low cost per barrel oil production at Jubilee and the West Africa non-operated portfolio with 2015 opex at US$10.0/bbl and US$15.0/bbl respectively; cost savings and synergies from Jubilee and TEN in Ghana to achieve around US$8/bbl opex in 2018.

  • 2015 capex of US$1.7 billion; US$1.1 billion forecast for 2016 with work ongoing to potentially reduce to US$0.9 billion; ability to reduce Group annual capex to c.$0.3 billion from 2017 onwards if the low oil price persists.
  • West Africa working interest oil production averaged 66 600 bpd in 2015; production guidance in 2016 for the region is 73 - 80 000 bpd. TEN Project over 85% complete and on track and on budget for first oil between July and August 2016.
  • Successful Kenya appraisal programme underpins estimated gross recoverable resource guidance of 600 million bbls.

  • Adapted from a press release by Louise Mulhall

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