490% increase in first half earnings at Tullow Oil

Irish exploration company Tullow Oil has recorded a 490 per cent rise in turnover for the first half of this year, an increase largely attributable to its acquisition of assets in the southern North Sea from BP Arco.

Tullow announced yesterday that its first-half turnover had been £27.1 million sterling (£34.41 million), compared to just less than £4.6 million sterling for the corresponding period last year. After operational and exploration costs, this translates into a net profit of £4.6 million sterling for the period, a figure in stark contrast to a £19.27 million (£15.18 million) loss posted by the company at the end of 1999.

Tullow has transformed itself in the past year, mainly due to the addition of the two former BP Arco "packages" in the southern North Sea. For the first half of 2001, these assets produced total revenues of £68 million sterling, of which £23.4 million sterling was booked as turnover. This figure was boosted by a gas price rise in the period since acquisition. The company also commenced drilling in Ivory Coast, where it expects to yield first production in early 2002. In total, Tullow is now operational in at least nine locations across Europe, Africa and Asia.

Tullow managing director Mr Aidan Heavey was upbeat about the company's performance, characterising it as "a hell of a turnaround". Mr Heavey also said that Tullow was currently investigating additional acquisitions in the North Sea as well as in Africa and the Indian sub-continent. He indicated that Tullow had sufficient banking facilities to "buy the same again" in the North Sea, suggesting a buying power of more than £200 million sterling.

Tullow was domiciled again in the UK at the end of last year, largely to facilitate UK institutional investors. The company is now listed in the FTSE All-Share index, but Mr Heavey said yesterday that a promotion to the FTSE 250 might be expected in the near term. The company has also decided to make itself more attractive to potential US shareholders by launching an American Depositary Receipt programme.

Tullow was trading up 1 per cent at 94p sterling in London yesterday.