Tullow Oil (TLW) H1 2024 earnings summary

Executive summary

• Achieved strong first half 2024 results with all key financial metrics improving year-over-year, driven by higher production, realized oil prices, and lower expenditure, following the Jubilee South East project completion and strong TEN performance.

• Ghana drilling programme completed safely and ahead of schedule, with five new Jubilee wells brought onstream and no lost time injuries over 1,000 days of safe operations, despite two minor oil spills that were swiftly contained.

• Final investment decision taken on a $90 million nature-based carbon offset initiative in Ghana, supporting 2030 Net Zero target.

• Asset swap with Perenco in Gabon completed, simplifying the portfolio and resulting in a $38.9 million asset revaluation gain.

• No interim dividend declared for 2024.

Financial highlights

• Profit after tax rose 180% to $196 million compared to H1 2023, supported by higher production and oil prices.

• Revenue was $759 million, with a realized oil price of $77.7/bbl after hedging.

• Adjusted EBITDAX reached $1,282 million; basic EPS was 13.5 cents.

• Net debt at 30 June 2024 was $1.7 billion, down from $1.9 billion a year earlier, with $700 million liquidity headroom.

• Capital expenditure decreased to $157 million, aided by early rig release in Ghana and reduced spend in Gabon.

Outlook and guidance

• 2024 production expected at the lower end of 62-68 kboepd guidance due to underperformance of the J69 well at Jubilee.

• CapEx forecasted at ~$230 million, $20 million below previous guidance; decommissioning costs of ~$70 million mainly in H2.

• Free cash flow for 2024 guided at $200–$300 million, with delivery heavily weighted to H2.

• Net debt targeted below $1.4 billion by year-end, with a medium-term goal of less than $1 billion and gearing below 1x.

• No uncovered debt maturities until May 2026; focus on deleveraging and capital structure optimisation.