Tullow Oil revenue falls while losses narrow

Independent oil and gas exploration and production group Tullow Oil announced its full year results for the year to 31 December on Wednesday, with sales revenue falling 21% to $1.27bn and gross profit down 8% to $546.9m.

The FTSE 250 company said its administrative expenses were 40% lower during the year at $116.4m, with restructuring costs down 70% at $12.3m and losses on disposals narrowing 94% to $3.4m.

Its goodwill impairment was 205% wider, however, coming in at $164m.

Tullow’s exploration costs written off totalled $732m for the year, 3% smaller, with impairment of property, plant and equipment improving 59% to $167.6m.

Its provision for onerous service contracts was $114.9m, a 38% improvement.

Tullow Oil said its operating loss for the year was $754.7m, an improvement of 31%, while its loss after tax improved 42% to $597.3m.

Operating cash flow was 20% lower at $774m.

“The clear highlight of 2016 was delivering Ghana's second major oil and gas development, the TEN fields, on time and on budget,” commented chief executive Aidan Heavey.

“Production from TEN, alongside our other West African oil production, has provided Tullow with positive free cash flow and enabled us to begin the important process of deleveraging our balance sheet.”

Heavey said as the company focussed its free cash flow primarily on reducing debt, capital discipline remained critical.

“We have made excellent progress with our East African developments and are building a high quality exploration portfolio to grow our business.

“As I move to become chairman of the group and hand over to Paul McDade, Tullow has the right assets and expertise to take full advantage of the opportunities ahead.”