Tullow loses US$1.6bn; 35% of staff to be retrenched

Tullow Oil has announced a loss after tax of US$1.6 billion for the group in 2019.

According to its 2019 Auditd Financial Report, the loss after tax was driven by exploration write-offs and impairments totalling US$2.0 billion.

This include revised Uganda write-off.

Revenue was, however, US$1.68 billion while gross profit was US$759 million.

The loss in the business has triggered the suspension of dividend while the year 2020 capex has been lowered to US$350 million.

According to the report, the group is being restructured to create an effective and efficient organisation.

As such, there will be “35% headcount reduction”.

The group, however, said the areas of potential investment to maintain long-term production and reserve recovery have been identified at both Jubilee and TEN

Dorothy Thompson, Executive Chair, Tullow Oil plc, commented on Thursday, 12 March 2020: “This has been an intense period for Tullow as we have worked hard on a thorough review of the business which has led to clear conclusions and decisive actions. We are focused on delivering reliable production, lowering our cost base and managing our portfolio to reduce our debt and strengthen our balance sheet. Even with recent events in oil markets, Tullow’s assets remain robust: we are a low-cost African oil producer, with a strong hedging position, substantial reserves that underpin our business and a high potential exploration portfolio.”

On the outlook, the oil giant said the 2020 free cash flow forecast of $50-$75 million is at $50 per barrel.

However, 60% of 2020 sales revenue have been hedged with a floor of $57 per barrel.

It concluded saying Jubilee Oil in Ghana is performing well after gas processing facility upgraded, increased gas offtake agreed, and sea-water injection capacity optimised.