TIDMTLW TIDMTTM TIDMTTM
RNS Number : 0059C
Tullow Oil PLC
16 June 2021
TULLOW OIL PLC
2021 Annual General Meeting - CEO Statement
16 June 2021 - Tullow Oil plc (Tullow) issues the following
statement from its CEO, Rahul Dhir, ahead of its Annual General
Meeting (AGM) today. Due to Covid-19 restrictions, the meeting will
be held via an audio cast. Instructions for joining the audio cast
can be found at the end of this statement or within the Notice of
Meeting.
Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented
today:
"Dear Shareholders,
Today will be my first AGM since joining Tullow as CEO and I
wanted to take the opportunity to reflect on my first year and
provide an update on recent events and current operations.
A year of significant change
When I joined in July last year, I said that I was excited at
the opportunity to lead Tullow and re-build an exceptional company.
We have since taken necessary steps to transform the business and,
after a year of significant change, I believe we have emerged as a
new company with a fundamentally different approach. We have
shifted our focus away from exploration and development and
long-cycle capital commitments to a production focused company with
a robust, cash generative business plan.
At our Capital Markets Day in November 2020 I laid out our
10-year business plan which focuses over 90% of our capital
investment in our high margin production assets in West Africa.
This will generate material cashflow to self-fund high return, fast
payback investment opportunities and reduce debt - even at low oil
prices. The delivery of this business plan required us to address
several fundamental aspects of the business and I am proud to
report that we have made excellent progress on the following:
-- Reducing our cost base: we are delivering cost savings across
the business including annual G&A cash savings of $125 million.
We are becoming a performance focused organisation where every
barrel matters and every dollar counts.
-- Improving operational performance: our ongoing operational
turnaround is delivering more reliable and consistent operating
performance with 98% average uptime year-to-date at Jubilee and TEN
and better utilisation of our existing infrastructure.
-- Rigorous capital allocation: we are focusing on high return
and fast payback investments in our production assets and have
significantly reduced capital allocation to long-cycle
projects.
-- Reducing our debt: We have sold our interests in Uganda,
Equatorial Guinea and the Dussafu Marin permit in Gabon, raising
over $700 million in proceeds. This asset sale programme puts us
well on the way to realising c. $1 billion over two years through
assets sales and cost reductions.
-- Simplifying our capital structure: we recently completed a
comprehensive debt refinancing which gives us the financial
stability to deliver our business plan.
-- Strong ESG focus: we announced in March that we aim to become
Net Zero (Scope 1 & 2) by 2030 as part of our commitment to
sustainability. In addition, we maintain our commitment to social
investment and developing local content.
These changes required a great deal of work from everyone at
Tullow and I would like to recognise the vital part that our Chair,
Dorothy Thompson, played in making Tullow a much more efficient and
effective organisation. Dorothy led the Company through its most
turbulent time and I thank her on behalf of all our staff for her
tireless efforts in securing Tullow's future.
Good operational progress across the Group
Group production to the end of May 2021 averaged c.62,000 bopd,
in line with expectations. This figure reflects the completion of
the sale of our Equatorial Guinea interests on 31 March 2021, with
no production from these assets recorded past the first quarter. On
9 June 2021 we announced the sale completion of the Dussafu Marin
permit in Gabon and we will adjust our full year guidance to
reflect both these divestments in our upcoming Trading Statement on
14 July 2021.
In Ghana, our operational improvement plan is delivering results
with 98% average uptime year-to-date across both the Jubilee and
TEN FPSOs. As we have previously stated, reliable gas offtake and
water injection are an important part of our strategy to optimise
reservoir performance and address production decline. We continue
to enhance the capacities of both systems to support long-term
stable production. I am pleased to report that production
performance continues to be supported by reliable gas offtake from
the Government of Ghana which is regularly averaging between 110 -
130 mmscfd. We also continue to see improved water injection rates
in excess of 200 kbwpd.
In line with our plans outlined at our Capital Markets Day, we
announced in April that we started a multi-year drilling campaign
in Ghana. In 2021, we are planning to drill four wells in total,
consisting of two Jubilee production wells, one Jubilee water
injector well and one TEN gas injector well. We have successfully
drilled the first Jubilee production well and the Jubilee water
injector well, and the reservoirs encountered are in line with
expectations. The rig will now carry out the completion of these
two wells with tie-in and start-up of both wells expected in the
third quarter of 2021.
In Kenya, licence extensions were granted for Blocks 10BB &
13T until end 2021. Tullow and its JV Partners have been working to
deliver a full field development plan that is sustainable and
economic at low oil prices. The technical work is now complete and
has been aided by the dynamic data gathered through the Early Oil
Production Scheme which ended in 2020. Resource volumes are now
being audited and a detailed project plan will be prepared for
discussion with the Ministry of Mining and Petroleum and the
Government of Kenya.
Good progress on the project continues to be made with two
tangible milestones recently achieved. Firstly, the first berth at
the Lamu Port was commissioned in May 2021 by H.E. The President of
Kenya. This is an important part of the broader Lamu Port and Lamu
Southern Sudan-Ethiopia Transport corridor project. Secondly, the
public hearing was recently held for the pipeline Environmental and
Social Impact Assessment for the midstream project. Overall, the
Kenya development project continues to receive significant
Government support and is making good progress. I look forward to
providing further updates covering the revised development plan and
our strategy in the second half of the year.
Finally, our exploration team continues to focus on unlocking
value from the substantial risked resources in the emerging and
maturing basins of Guyana, Suriname, Argentina and Côte
d'Ivoire.
Comprehensive refinancing underpins financial resilience
In May, we fully addressed our near-term debt maturities with a
comprehensive refinancing of our capital structure. We successfully
issued a five-year $1.8 billion high-yield bond which, along with
cash on balance sheet, allows us to repay and redeem bonds that
were due in 2021 and 2022 and repay and cancel our Reserves Based
Lending (RBL) facility. We also agreed a $600 million Super Senior
Revolving Credit Facility which will primarily be used for working
capital purposes. A $800 million high-yield bond due in 2025 is now
our nearest-term material debt maturity. Our new capital structure
and maturity schedule provides the financial stability to deliver
on our business plan.
Hedging continues to be an important part of our financial risk
management strategy protecting against oil price volatility. We are
building on this prudent approach with an increase in the amount of
production entitlement we protect to 75% for a period of 24 months
from completing our debt refinancing in May, and to 50% for another
12 months beyond that. We have been implementing our hedge
requirements over the last few weeks and we have now secured over
60% of the necessary hedge volumes. Of the new hedges that have
been completed post the high-yield bond issue, we have achieved our
target floor of c.$55/bbl and weighted average collars of
c.$69/bbl, with most recent hedge collars in excess of $70/bbl. Our
total portfolio, when including our previous near-term hedge
position, has weighted average collars of c.$51-68/bbl, giving us
robust downside protection as well as access to upside. We remain
on track to add the remaining hedge volumes by year end.
Clear runway to deliver our plan and take the business
forward
At our Capital Markets Day, we outlined a business plan that can
deliver strong cash flows and reduce debt to achieve equity value
growth. With the refinancing of our debt now completed, we now have
the financial stability and time we need to deliver this plan. We
are moving forward positively to deliver our vision of Tullow as an
Africa-focused oil and gas production company, with a deep
inventory of investable opportunities in our portfolio.
I am committed to continuing to re-build and grow our
exceptional business and further enhance our investment proposition
for all investors. Tullow is uniquely placed to create material
value for host nations, work closely and collaboratively with local
communities and enhance local content where we work. We recognise
our role in reducing emissions and we have a clear route to achieve
significant improvements in our performance by 2025, ahead of being
Net Zero on our scope 1 & 2 emissions by 2030.
Our focus therefore is on delivery and we have the team in place
to deliver success.
Finally, I would like to thank our investors, our host nations
and our staff for the support and commitment during this
transformational year. I look forward to sharing our continued
progress with you."
Rahul Dhir, Chief Executive Officer, Tullow Oil plc
AGM AUDIO CAST
12:00pm (BST)
In light of social distancing measures aimed at reducing the
transmission of the COVID-19 virus in the UK, please note that
attendance in person at the AGM is not possible and shareholders
have been asked to vote in advance by proxy. Continued shareholder
engagement is very important to us and therefore we have arranged a
live audio-cast of the AGM. Shareholders can listen to the meeting
and ask questions throughout via audiocasting, using your
smartphone, tablet or computer.
Instructions to join: Join by either downloading the dedicated
"Lumi AGM" app or by accessing the AGM website,
http://web.lumiagm.com. Whether you use the app or the website, you
will be asked to enter a meeting ID which is 149-244-292. You will
then be prompted to enter your unique Shareholder Reference Number
(SRN) and PIN. Your PIN and your Shareholder Reference Number,
which starts with a C or G and is 10 digits long, is available on
the email broadcast sent to you if you are an online user or on the
Form of Proxy if you elected for hard copy mailing. Access to the
meeting via the app or website, and the ability to submit
questions, will be available from 11a.m. on 16 June 2020. The
meeting will formally start at 12 noon.
Downloading the app: Download the latest version of the Lumi AGM
app onto your smartphone from the Google Play Store(TM) or the
Apple(R) App Store. We recommend that you do this in advance of the
AGM. Please note that the app is not compatible with certain older
devices.
Guest access: Non-shareholders can listen to the audio cast of
the AGM as guests using the link and meeting ID above, but guests
will not be able to ask questions.
Download all AGM documents and audio cast guide:
www.tullowoil.com/agm
CONTACTS
============================================= ===================
Tullow Oil plc Murrays
(London) (Dublin)
(+44 20 3249 9000) (+353 1 498 0300)
George Cazenove (Media) Pat Walsh
Nicola Rogers and Matthew Evans (Investors) Joe Heron
============================================= ===================
Notes to editors
Tullow is an independent oil & gas company, quoted on the
London, Irish and Ghanaian stock exchanges (symbol: TLW). The Group
has interests in over 50 exploration and production licences across
11 countries, including Ghana where it operates the Jubilee and TEN
fields. In March 2021, Tullow committed to becoming Net Zero on its
Scope 1 and 2 emissions by 2030.
For further information, please refer to our website at
www.tullowoil.com.
Follow Tullow on:
Twitter: www.twitter.com/TullowOilplc
YouTube: www.youtube.com/TullowOilplc
Facebook: www.facebook.com/TullowOilplc
LinkedIn: www.linkedin.com/company/Tullow-Oil
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
AGMMZGMVVKLGMZM
(END) Dow Jones Newswires
June 16, 2021 02:00 ET (06:00 GMT)
Tullow Oil (LSE:TLW)
Historical Stock Chart
From Mar 2024 to Apr 2024
Tullow Oil (LSE:TLW)
Historical Stock Chart
From Apr 2023 to Apr 2024