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Tullow Oil FY12 Pre-Tax Profit Rises On Higher Revenues, Gain

2/13/2013 7:14 AM ET

Oil and gas firm Tullow Oil Plc (TLW.L, TUWOY.PK, TUWLF.PK) Wednesday reported a higher pre-tax profit for full year 2012, reflecting a rise in revenues as well as a gain on Uganda farm-down. The shares are up about 6 percent on the London Stock Exchange.

On February 21, 2012, the Group completed the farm-down of one-third of its Uganda interests to both French oil giant Total SA (TOT, TTFNF.PK, TTA.L) and China's state-owned oil and gas explorer CNOOC Ltd. (CEO) for a headline consideration of $2.9 billion. Profit on disposal totaled $701 million.

For the full year 2012, the company posted profit before tax of $1.12 billion, higher than $1.07 billion in the prior year.

The company noted that the $701 million pre-tax gain on Uganda-farm down was largely offset by an increase in total exploration cost write-offs of $300 million as well as a further asset write-down, giving a total of $671 million, and higher operating costs associated with mature fields.

Meanwhile, earnings per share declined to 68.4 cents from 72 cents per share a year ago. Operating profit grew 5 percent to $1.19 billion.

Sales revenues rose 2 percent to $2.34 billion, mainly due to a 2 percent increase in sales volumes.

Aidan Heavey, chief executive of the company stated, "Our financial position underpins our highly ambitious 2013 exploration programme which has high-impact wells planned in Kenya, Ethiopia, Norway, Mauritania, Mozambique, Côte d'Ivoire and French Guiana." Working interest production improved 1 percent to 79,200 barrels of oil equivalent per day or boepd. The oil firm had previously guided average net production of 80,000 to 84,000 boepd for the full year.

The slight shortfall from the guidance was due to enforced shutdown of its non-operated production in the CMS area of the UK in early December 2012 following a safety incident.

Realised oil price per barrel was $108, unchanged from last year. Realised gas price per therm increased 3 percent to 58.5 pence.

For full-year 2013, production is expected in the range of 86,000 to 92,000 boepd, including gas producing assets currently held for sale.

Capital expenditure in 202 was $1.9 billion, up from $1.4 billion in 2011. For 2013 capital expenditure is forecast to reach $2.0 billion.

In addition, the board has proposed an unchanged final dividend of 8 pence per share, to shareholders of record on April 19, 2013, payable on May 16.

TLW.L is currently trading at 1,238 pence, up 58 pence or 4.92 percent, on a volume of 3.12 million shares.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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