Tullow hit by $415m write-off as first-half profits fall

2nd Jul 2014 07:46

Tullow Oil has reported a decline in profits on flat revenues in its first half and said it expects an exploration write-off of $415m.The company said the write-off was a result of "mixed" frontier exploration results in Mauritania, Ethiopia and Norway, as well as the decision not to renew certain licences.After a Norwegian tax credit of $110m, the net write-off is trimmed to $305m.Tullow also announced that it would record a loss on disposal for the first half of $115m in relation to a farm-down of assets in Uganda.Total revenues in the six months to June were unchanged on the prior year at $1.3bn, while gross profit declined to $0.65bn from $0.8bn.Working interest production fell over the year to 78,100 barrels of oil equivalents per day (boepd) from 88,600 boepd, due to the underperformance of its Schooner asset in the North Sea and non-operated assets in Gabon.Nevertheless, the company has maintained its full-year production guidance at 79,000 boepd to 85,000 boepd."With potential basin-opening wells across the portfolio coming up in the second half of the year and strong revenue and cash flow, Tullow is in a strong position for the remainder of this year and into 2015," said Chief Executive Aidan Heavey. The company said it was "extremely well-funded" after a second $650m bond issue in April and re-financings of its $750m revolving credit facility and the NOK3bn Norwegian exploration loan facility.BC