Tullow Oil expecting significant fall in first-half revenue

Tullow Oil updated the market ahead of the end of its first half on Thursday, with first oil projected from the TEN project expected imminently, but revenue and gross profit taking a dive.

The FTSE 250 firm gave revenue guidance for the half-year of $0.5bn total revenue, down from $0.8bn last year, with $0.2bn gross profit dropping from last year’s $0.3bn figure.

Administrative expenses remained the same at $0.1bn, and pre-tax operating cash flow was anticipated to be $0.2bn, down from $0.5bn.

“After three years of hard work, I am delighted to say that the TEN Project is expected to deliver first oil within the next three to six weeks,” said chief executive Aidan Heavey.

“This transformational project has remained on schedule and on budget since it began in 2013.”

Heavey said production at Jubilee has stabilised with a gross rate in June of around 90,000 barrels of oil per day.

He added that Tullow has also made “excellent progress” on the long-term solution to the turret issue, with the Jubilee partners deciding that the best way forward is to spread moor the FPSO.

“In East Africa, the government agreement that there will be separate pipelines to develop resources in Uganda and Kenya brings greater clarity to both projects.

“In addition in Kenya, a new programme of exploration wells focusing on growing resources is due to start in the fourth quarter,” Heavey explained.

He said the New Ventures team remains focused on high grading and replenishing the exploration portfolio with a new licence signed in Zambia and ongoing portfolio management and seismic survey activity in South America.