Mzee geza vipi wewe? tullow oil just made profits, heres friday news from daily telegraph u.k
Tullow Oil delivers surprise profit despite production woes
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Tullow Oil shrugged off lower production and weaker oil prices to post a surprise first half profit CREDIT: JODY AMIET/AFP/GETTY IMAGES
By Jillian Ambrose
27 JULY 2016 • 5:54PM
T ullow Oil has delivered a surprise half-year profit, despite production issues at its West African fields and weak oil prices.
The mid-cap explorer was expected to report a post-tax loss of $196m, but made a $30m profit. Pre-tax profit totalled $24m, compared with a loss of $10m last year.
Tullow’s unexpected growth comes in spite of low oil prices and falling production. Prices averaged less than $40 a barrel in the first six months of the year, and dropped to less than $28 in January. In the same period last year, the average price of a barrel of oil was $56.
“Tullow is well placed to move forward with a restructured and more efficient business that can deliver growth”
Tullow Oil chief executive Aidan Heavey
Ian Springett, Tullow’s finance boss, said the explorer has protected its production against the weaker market price by hedging around half of its volumes at $74 a barrel for 2016 and dramatically cutting spending levels at its already low-cost portfolio. For next year the company has locked in a price of $65 a barrel for its oil, he added.
“Even if oil prices were to fall we’re pretty well protected,” Mr Springett said, adding that the company should achieve free cash flow by the fourth quarter.
Tullow also suffered an extended shutdown of its Jubilee oilfield off the coast of Ghana in April
. Production restarted in early May.
The oilfield produced 62,900 barrels of oil a day in the first half, but this is expected to reach 85,000 barrel a day in the second half of the year. Tullow is also due to begin production at its TEN oilfield, which is also located off the coast of Ghana, in August.
Aidan Heavey, chief executive of Tullow, said the TEN field would be "transformational” for the company as it would allow it to increase production while cutting costs, and help it to tackle its $4.7bn debt pile .
"Tullow is therefore well placed to move forward with a restructured and more efficient business that can deliver growth from its portfolio of high quality, low cost producing, development and exploration assets,” Mr Heavey said.