Tullow Oil profits jump in first half, capex scaled back

Tullow Oil was able to grew profits in the first half of 2024 despite a weaker top line, as the Irish oil and gas group reduced its capital expenditure budget for the full year.

The Ghana-focused producer reported revenues of $759 for the six months to 30 June, down from $777m the year before.

Sales volumes dipped to 51,200 barrels of oil equivalents per day (boepd) from 56,900 boepd last year, due to the reduction of two liftings in Gabon.

Nevertheless, lower volumes were slightly offset by the realised oil price rising to $77 a barrel from $73.30 previously.

Pre-tax profit totalled $368m, up from $217m the year before, as capex fell 16% to $157m and decommissioning spend dropped 80% to just $9m.

"During the first half of 2024, Tullow has continued to deliver strong operational and financial performance. We are pleased to report improved results across key financial metrics compared to the first half of 2023; with higher production and oil price realisations combined with lower expenditure," said chief executive Rahul Dhir.

Dhir said the company now entered a period of lower capex in the second half of the year and beyond, as the company scaled back its full-year capex target by $20m to $230m.

"We will continue to reduce debt through sustainable free cash flow generation, strengthening our balance sheet and providing optionality for investment, growth and future returns," he said.

Tullow said it remains on track for working interest production to be at the lower end of the 62,000-68,000 boepd range as previously guided.

The stock was down 0.2% at 27.39p by 0903 BST.