Tullow
Oil plc
AGM
Trading Update
16
May 2024 - Tullow Oil plc (Tullow) issues the following statement in
advance of the Group's Annual General Meeting (AGM). The meeting
will take place at Tullow Oil plc, Building 9, Chiswick Park,
London, W4 5XT at 11:00 BST today. We are also enabling
shareholders to listen to the AGM as well as participate remotely.
Instructions for joining the audio cast can be found at the end of
this statement or within the
Notice of Meeting.
The Group will publish its 2024 Half
Year Results on 7 August 2024.
The information contained herein has
not been audited and may be subject to further review and
amendment.
Rahul Dhir, Chief Executive Officer, Tullow, commented
today:
"I
would first like to thank our investors, host nations and host
communities for their support. At the AGM meeting later today, I
look forward to reflecting on the substantial progress Tullow has
made and the strong outlook for the future as we continue our
trajectory to build a unique pan-African platform for
growth.
Since the start of the year, we have seen good delivery of our
operational programme. We are on track to deliver our free cash
flow expectations of c.$600 million over 2024 to 2025 at $80/bbl
and we are well placed to capitalise on a higher oil price
environment. At the same time, we are positioning ourselves to
deliver material sustainable free cash flow in 2026 and
beyond."
Financial update
· Full
year free cash flow guidance remains $200-300 million at $80/bbl,
with a weighting towards the second half of the year largely driven
by the timing of cash tax payments, liftings and revenue receipts
and phasing of capital spend.
· Increased access to oil price upside for the remainder of 2024
and 2025 as legacy hedges fully roll off in May 2024 (see table
below for latest position).
· An
increase of $10/bbl across the year to $90/bbl would generate an
additional c.$100 million of free cash flow.
· On
track to reduce net debt to less than $1.4 billion and cash gearing
of net debt to EBITDAX to c.1x at $80/bbl by the end of
2024.
· On
track to deliver c.$600 million free cash flow over 2024 to 2025 at
$80/bbl and sustainable free cash flow generation
thereafter.
Operations update
Group Production
· Group
working interest production in the first quarter of 2024 was c.59
kboepd, including c.7 kboepd of gas production, within the expected
range for the period. 2024 Group working interest production
guidance remains 62-68 kboepd, with the full-year outcome expected
to be towards the lower end of the range.
Ghana
Jubilee
· Jubilee oil production in the first quarter was c.93 kbopd
gross (c.36 kbopd net). Three new wells were brought on stream
during the period and production efficiency was high at
c.99%.
· In
April 2024, a further production well was brought onstream and a
water injector well is expected online later in the second quarter.
This will bring the current drilling programme to an end,
approximately six months ahead of schedule.
· Rates
from the most recent production wells are lower than pre-drill
expectations as work continues to optimise pressure support across
the field.
· Lower
incremental production from these wells will likely result in Group
full-year production towards the lower end of the guided range.
This does not impact Tullow's cash flow guidance as the total
number of liftings expected from Ghana remains unchanged.
· Net
gas export during the first quarter was c.6.5 kboepd. The interim
gas sales agreement that is currently in place for Jubilee
associated gas has been extended for 18 months at c.$2.95/mmbtu
with applicable indexation.
TEN
· TEN
production in the first quarter was ahead of expectations at c.19
kbopd gross (c.10 kbopd net), supported by production efficiency of
c.99% and optimisation of existing wells.
· Work
and engagements continue on the future development options for the
TEN fields including the long-term gas sales agreement and the
potential to unlock further opportunities around the existing TEN
infrastructure.
Non-operated and exploration
· Production from our non-operated portfolio in Gabon and Côte
d'Ivoire was in line with expectations at c.13 kboepd net in the
first quarter.
· Tullow
was deeply saddened to learn of the incident at the
Perenco-operated Simba field in Gabon on 20 March 2024, which
resulted in fatalities. Tullow's thoughts are with all those
affected by this event and the Group continues to offer its support
to the operator.
· As a
consequence of the incident, the Simba field remains shut in while
the operator completes the incident investigation. Net production
from the Simba field was expected to average c.1.3 kbopd in 2024
but there is scope to make up any shortfall
from other fields in the portfolio. Therefore cash flow from the
portfolio remains unchanged.
Hedge
Portfolio
Oil
hedge portfolio as of 30 April 2024
|
May/June
2024
|
2H 2024
|
1H 2025
|
Downside protection
(% of production/average protected
price per bbl)
|
61%
/ $59
|
61%
/ $60
|
25%
/ $59
|
Capped upside (% of production/average price cap per bbl)
|
23%
/ $91
|
25%
/ $112
|
n/a
|
Call spreads*
(% of production/average call spread
range per bbl)
|
2%
/ $106-115
|
15%
/ $83-93
|
17%
/ $94-104
|
*
Oil price upside giveaway limited to the call spread
range
AGM audio
cast
11:00am BST
This year, we are enabling
shareholders to listen to a live audio cast of the AGM as well as
participate remotely.
In order to participate at the
meeting, you will need to visit http://www.meetnow.global/TULLAGM2024
on your device operating a compatible browser
using the latest version of Chrome, Firefox, Edge or Safari. Please
note that Internet Explorer is not supported. It is highly
recommended that you check your system capabilities in advance of
the meeting day.
If you are a shareholder, you can
use your unique Shareholder Reference Number and PIN as displayed
on your Form of Proxy/Attendance Card. If you are an appointed
proxy or a corporate representative, you will have had to be
provided with a unique invite code to enter the meeting and
exercise your rights. These credentials will be issued one working
day prior to the meeting, conditional on evidence of your proxy
appointment or corporate representative appointment having been
received and accepted. If you have not been provided with your
meeting access credentials, please ensure you contact Computershare
on the morning of the meeting, but no later than one hour before
the start of the meeting.
Access to the meeting via
http://www.meetnow.global/TULLAGM2024
will be available from 10.00am. During the
meeting, you must ensure you are connected to the internet at all
times in order to vote when the Chair commences polling on
Resolutions being put to the meeting. Therefore, it is your
responsibility to ensure connectivity for the duration of the
meeting.
Technical issues
If you experience any technical
issues with the site, you may either call our Registrar on the
telephone number provided on the site or once you have entered the
meeting, you can raise your question using the chat function. If
you have technical issues prior to the start of the meeting, you
should contact our Registrar on the shareholder
helpline.
Process
The process of asking questions and
accessing the AGM audio casting will be further explained within
the application and located on the information page.
CONTACTS
|
|
Tullow Investor Relations
ir@tullowoil.com
Nicola Rogers Matthew Evans
|
Camarco (Media) (+44 20
3781 9244)
Billy Clegg
Andrew Turner
Rebecca Waterworth
|
Notes to editors
Tullow is an independent energy
company that is building a better future through responsible oil
and gas development in Africa. The Company's operations are focused
on its West-African producing assets in Ghana, Gabon and Côte
d'Ivoire, alongside a material discovered resource base in Kenya.
Tullow is committed to becoming Net Zero on its Scope 1 and 2
emissions by 2030 and has a Shared Prosperity strategy that
delivers lasting socio-economic benefits for its host nations. The
Group is quoted on the London and Ghana stock exchanges (symbol:
TLW). For further information, please refer to:
www.tullowoil.com.
Follow Tullow on:
X: www.twitter.com/TullowOilplc
YouTube: www.youtube.com/TullowOilplc
Facebook: www.facebook.com/TullowOilplc
LinkedIn: www.linkedin.com/company/Tullow-Oil