Irish explorer Tullow Oil has announced that it has recorded a $1.694B in loss after tax for the year ended 31st December 2019. According to the company it has undertaken a business review on all aspects of its operations and cost base including a headcount reduction of 35% as part of the restructuring desired to create an effective and efficient organizations.
Tullow adds that it is targeting a 45 percent reduction in exploration budget as part of its disciplined exploration strategy being headed by a new head of exploration after appointment of Mark MacFarlane as COO. The company adds that through portfolio management it plans to raise in excess of $1 billion of proceeds including further streamlining of the business and reduce gearing.
“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,” says Dorothy Thompson, Executive Chair, Tullow Oil Plc.
In Kenya the company says it continues progress towards the final investment decision (FID) with Front End Engineering Design (FEED) studies for the upstream and midstream parts of the project were finalised . Progress to FID is however been affected by access rights to land and water and the long-form commercial agreements to be entered with the Government of Kenya and the company warns this may make it hard to reach FID by year-end 2020. Meanwhile trucking operations remain suspended until all roads are repaired to a safe standard.
In Uganda the company says it has revised its write-off amounts with the expiry of the Sale and Purchase Agreements (SPAs) in August 2019 as a result of being unable to agree all aspects of the tax treatment of the transaction with the Government of Uganda which was a condition precedent to completing the SPAs.
On the recent drop in oil price the company says it remains robust with a strong hedging potential.
“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,” She added.