Tullow Oil (TLW) H2 2024 earnings summary

Executive summary

• Strong business momentum in 2024 with continued deleveraging, reducing net debt to $1.45 billion and targeting ~$1.0 billion by YE25, supported by the $300 million Gabon asset sale.

• Interim CEO transition underway, with a permanent replacement expected soon.

• Achieved strong operational performance with 98% efficiency, early and under-budget drill campaign completion, and major operational achievements including the Gabon asset sale and 4D seismic campaign.

• Addressed key operational issues in Ghana, improving water injection and facility uptime.

Financial highlights

• 2024 production averaged 61,200 boe/d, impacted by well performance and water cut issues; 2025 guidance is 50,000–55,000 boe/d.

• Realised oil price of $76/bbl in 2024; 2025 scenario based on $70/bbl.

• 2024 CapEx was $230 million, with 90% allocated to producing assets; 2025 CapEx guided at $250 million.

• Organic free cash flow for 2024 was $156 million, affected by delayed $50 million gas payments; 2025 guidance is $100 million at $70/bbl, with sensitivity of $50 million per $5/bbl price increase.

• Net debt at year-end 2024 was $1.45 billion, expected to fall to $1 billion by end-2025 after Gabon proceeds.

Outlook and guidance

• Focus for 2025 is on completing Gabon disposal, resolving Ghana tax arbitrations, and refinancing capital structure.

• Net debt projected to fall to ~$1.0 billion by YE25, assuming Gabon sale completion.

• Material hedge portfolio protects ~60% of forecast sales volumes at $59/bbl through 2025.

• Production optimization and reserve growth targeted through drilling and 4D seismic data.

• No near-term acquisitions planned; priority is balance sheet transformation and shareholder returns.