Tullow Oil first-half loss narrows, but dividend scrapped due to lower oil prices

Tullow Oil reported a narrowing of its pre-tax loss for the first half, but cut it interim dividend as revenue fell on the back of lower oil prices.

For the six months ended 30 June, the oil exploration and production company posted a pre-tax loss of $10.2m, down from $28.9m in the same period last year on revenue of $819.9m, down from $1.26bn.

Although revenue fell, the company was able to narrow its pre-tax loss thanks to a decline in exploration write-offs, which came to $87.5m compared with $402.2m in the first half of last year.

Tullow said that in light of the fall in oil prices in the second half of 2014, it has decided to suspend its dividend.

“At a time when Tullow is focusing on capital allocation, financial flexibility and cost reductions, the board believes that Tullow and its shareholders are better served by investing these funds into the business,” it said.

The company said working interest production averaged 74,600 barrels of oil equivalent per day, which was a 5% drop from last year, while the average realised oil price was $70.6 a barrel versus $106.7.

Tullow said the performance of its Jubilee field was ahead of expectations in the first half, with production averaging 105,000 bopd.

At 0956 BST, the company's shares were down 0.4% at 236.20p.