Tullow Oil celebrates record year as profits rocket - UPDATE

14th Mar 2012 07:06

Pre-tax profit at Africa-focused oil and gas giant Tullow Oil broke through the billion dollar barrier in 2011, helped by a ramp-up in production and significantly higher commodity prices."2011 was a very good year for Tullow. Industry leading exploration success continued with the opening of a major new basin offshore French Guiana as well as further discoveries in Africa," the firm said.Pre-tax profit for the 12 months ended December 31st surged by 499% from $179m to $1,073m on sales that jumped 111% from $1,090m to a record $2,304m.Working interest production increased by 35% during the year, from 58,100 barrels of oil equivalents per day (bopped) to 78,200, while the realised oil price was 38% higher at $108 per barrel, from $78 per barrel in 2010.Tullow said it was "another year of industry leading exploration and appraisal (E&A) performance", boasting a 74% success ratio.The strong results prompted the group to double its full-year dividend from 6p to 12p per share. Operating cash flow (before working capital) also surged, up 132% from $789m to $1,832."Tullow now has a strong balance sheet providing financial flexibility and a solid foundation for future growth," the group said.According to Prime Markets' head of dealing Richard Curr, "Tullow Oil is one of the most phenomenal stories from the sector for many years, and its amazing run of success in Africa over the past few years has been accompanied by stellar share price growth and returns for investors."He said that the company has the sort of impressive fundamental growth numbers normally seen in an "explosive small cap growth stock".Since the year-end, the company completed a $2.9bn farm-down to CNOOC and Total of two-thirds of its Ugandan acreage. This will be realised in the company's 2012 results. First oil from the licences could be as early as 2014, with material production volumes likely from 2016 onwards.Shares were trading 2.13% higher at 1,485p in afternoon trade in London.BC