Tullow Oil pegs back full year loss to $1bn

Tullow Oil has nearly halved its full year loss, however the company’s revenues for the year have dropped substantially.

The FTSE 250 oil and gas exploration and production group released its results for the year to 31 December 2015 on Wednesday.

It showed revenues had fallen 27% for the year from $2.21bn (£1.52bn) in 2014 to $1.61bn, due to the fall in oil prices.

Its pre-tax operating cash flow also fell 38% from $1.55bn to $967m while gross profit fell 46% from $1.10bn to $591m.

However the company had pegged back its full-year loss from $1.97bn to $1.09bn in 2015.

It said Tullow has focused on cost savings, improved efficiencies, and a lower capital expenditure, for which it is aiming to cut another $1.1bn of capex in 2016.

Chief executive Aidan Heavey said the results show the company has adjusted well to last year’s low oil prices.

“We secured current and future cash flow through good operational delivery in West Africa, continued to build our resource base in East Africa, significantly cut costs across the Group and benefitted from our strong hedging position.”

He said 2016’s challenge is to be “equally robust” in responding to remaining uncertainties.

“In the year ahead, we have three key priorities: ensuring continued low cost production from West Africa - including the start-up of production from TEN between July and August 2016; driving further reductions in operating costs and capital expenditure; and focusing on deleveraging the balance sheet through free cash flow generation and strategic portfolio management.”

Shares in Tullow Oil sank 10.9p (6.75%) to 150.60 at 0940 GMT.