Tullow Oil recovers from loss position to record $49m profit in 2022


Tullow Oil recovered from its loss position in 2021 to record a profit of $49 million in 2022.

The oil giant lost $81 million in 2021.

Data published by the oil exploration indicates that the company’s gross profit reached $1.086 billion in 2022.

This is compared with $647 million recorded in 2021.

Details of the 2022 earnings

The company’s revenue also went up by 40% to $1.7 billion. This included the hedge cost of $319 million.

Tullow Oil CEO on 2022 profit and operations

Commenting, the Chief Executive Officer of Tullow Oil, Rahul Dhir, noted that a high focus on cost control and a disciplined approach to operational efficiency drove a very strong performance for the year, “with group production in line with guidance and expectations, delivering free cash flow of $267 million, lowering net debt to $1.9 billion and reducing cash gearing to 1.3x net debt to EBITDAX”.

“We have multiple catalysts to deliver further profitable growth and there is strong momentum across the portfolio with the commissioning of Jubilee South East on track for the second half of 2023, bringing undeveloped reserves online and Jubilee gross production to more than 100 kbopd before the end of the year,” Mr. Dhir added.

He announced that Tullow Oil is also preparing a plan of development to monetise the remaining resources at TEN.

“We have created a unique platform of assets and capability, including industry leading safety performance, which positions us strongly to create significant value for all our stakeholders.”

Operations on Jubilee and TEN oil fields

According to the data, production from the Jubilee Oilfield increased from an average of 74.9 kbopd (26.6 kbopd net) in 2021 to 83.6 kbopd (31.9 kbopd net) in 2022.

Two wells were drilled in the Jubilee South East area in the second half of 2022 and a third well in January 2023.

Tullow said the primary target reservoir results are in line with expectations, but with upside from deeper appraisal target reservoirs that encountered oil resources for future development.

“These wells will commence production in the second half of the year after the installation and tie-in to the Jubilee South East Project subsea infrastructure, in line with the initial project schedule”.

The completion of the Jubilee South East Project will mark the end of the current major infrastructure spend in the Jubilee area with the majority of near-term capex expected to be focused on drilling and completing new wells.

Operations on the TEN Field

Production from the TEN fields averaged 23.6 kbopd (12.5 kbopd net) in 2022.

Continued excellent operational efficiency of c.98% (2021: c.97%) was achieved with overall production at the lower end of guidance.

Gross production at Ntomme averaged 16.8 kbopd for the full year.

Tullow clarified that no new wells were brought online during the year at Ntomme, but pressure support from existing gas and water injection wells resulted in steady production.

2023 Outlook for Tullow Oil

Gross production from Jubilee is expected to increase to over 100 kbopd with four new wells at Jubilee South East and a further Jubilee producer onstream later this year.

Tullow Oil said it is also forecasting that capital expenditure will be pegged at $400 million.

The statement showed that Ghana will account for significant amount of the capital expenditure.

source: myjoyonline