Tullow Oil (LSE: TLW) said its first-half production rose 14% to 88,600 barrels of oil equivalent per day, causing revenues to increase by 15% to $1.3bn. West Africa continues to be the main contributor, and it accounted for over three quarters of production.
Tullow’s underlying operating profits for the half came to £500m. Although this was some 40% down on last year, a straight comparison is complicated by the fact that Tullow’s headline figures for 2012 included a £700m gain from a farm down of an asset in Uganda, and a £450m loss due to exploration write downs.
A total of 27 wells were drilled in the first half of 2013, costing some $512m, which Tullow said had a 63% success rate.
Aidan Heavey, chief executive of Tullow Oil, said:
“Tullow continued to perform well in the first half of 2013. Our exploration-led growth strategy delivered major successes in Kenya and Ethiopia, further enhancing East Africa as a new oil region. We have six exciting exploration campaigns under way in the second half in 10 countries with 20 wells targeting multiple basins.
“Tullow also has a considerable pipeline of development activity. This includes reviewing potential development options for the over 300 million barrels of oil discovered onshore Kenya, the farm down of our interest in the TEN project in Ghana and reaching the final stages of agreeing the key components of the Lake Albert Basin development in Uganda.”
Looking ahead to the full year, Tullow expects production to remain at broadly the same level, with a target of 84,000 to 88,000 barrels.
Shares of the oil explorer were little moved this morning, up less than 1% to 1,034p. Although they are down some 30% year to date, the company is still valued just north of £9bn.
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> Stuart does not own any share mentioned in this article.
