Tullow PLC To Increase Oil Production In Ghana As Its Revenue Surges

Tullow Oil Plc has announced an increase in revenue for its 2018 operations.

The company’s revenue increased to $1.9 billion in 2018 compared to 1.7 billion dollars in 2017. There more in this news desk report.

In a financial statement released by the company, Tullow PLC recorded a profit after tax of 85 million dollars in 2018 compared to 175 million dollars recorded in 2017.

The company also announced that it would start paying dividends of a 4.8 cent per share to its shareholders.

By this, the company is looking to pay its shareholders about $100 million to shareholders this year.

Tullow is also working at reducing its debt of $3.1 billion  while it increases production in Ghana to 102,000 barrels of oil equivalent per day year from 90,000.

The company made Gross profit of $1.1 billion; and a Year-end net debt of $3.1 billion dollars.

Tullow Seadrill court case

In May 2018, an English Commercial Court in a trial ruled that Tullow was not entitled to terminate its West Leo rig contract with Seadrill on 4 December 2016 and invoked the contract’s force majeure provisions.

Following advice from counsel, Tullow decided not to appeal this ruling. Tullow paid Seadrill a contractual termination fee, other standby fees that accrued in the 60 days prior to termination of the contract and interest amounting to $248 million in aggregate.

Ghana Ivory Coast ITLOS case

Tullow returned to drilling in Ghana in 2018 following the conclusion of proceedings at the ITLOS tribunal in Hamburg in September 2017 and after gaining Government approval of the Greater Jubilee Full Field Development Plan.

Tullow began a new drilling programme in March with the Maersk Venturer and a second rig, the Stena Forth, was contracted during the year to work alongside the Maersk Venturer.

The second rig was contracted for an initial three-well campaign with flexible extension options reflecting conditions in the rig market which continue today.

The Stena Forth began drilling in October 2018 and the additional rig capacity enabled Tullow to carry out simultaneous drilling and completion activity, allowing the tie-in of new wells to be brought forward.

The results from this programme, which was completed within budget, were in line with, or exceeded, pre-drill expectations.

In 2019, Tullow expects to drill and complete seven new wells across the TEN and Jubilee fields allowing gross oil production from Ghana to rise to around 180,000 bopd.

In 2018, full year net gas production from the TEN fields and the UK averaged 1,700 boepd.

In 2019, Tullow will solely produce gas in Ghana following the cessation of production in Tullow’s UK assets in 2018.

BREXIT effect on Tullow

On the global scene Tullow said that, given the Group’s focus on Africa and South America, Tullow’s business, assets and operations will not be materially affected by Brexit.

Tullow also said it derives its income from crude oil, a globally-traded commodity which is priced in US dollars.

However, Tullow employs a number of EU nationals in the UK and according to the company, the Board is concerned about the uncertainty that a No Deal Brexit would cause these much-valued members of staff.

To help address this concern, Tullow has established a Brexit Focus Group to share information with affected employees and ensure they are up to date with the latest developments.

The Board also stated that it recognises that a No Deal Brexit could cause significant regulatory, legal and financial uncertainty with regard to our decommissioning programme in the UK North Sea.

It said Operators would have to be carefully guided by the Department for Business, Energy and Industrial Strategy as to exactly how decommissioning programmes should be executed and what tariffs or fees, if any, should be applied to non-UK service providers.