TULLOW OIL doubled its dividend to shareholders to 12 pence per share, after the London-listed exploration company posted a record set of results for last year, boosted by increased oil production and strong oil prices.
Pretax profits pushed through the $1 billion mark to $1.073 billion, a 500 per cent increase, while operating profits grew by 332 per cent to $1.132 billion.
Production for the year grew by 35 per cent to an average of 78,200 barrels of oil per day.
Revenue at the company, whose main interests are in Ghana and Uganda, grew by 111 per cent to $2.3 billion.
The results were within analysts’ expectations.
The rise in revenue was mainly down to a major increase in production at Tullow’s Jubilee field in Ghana last year, despite a slight pull back in the number of barrels of oil produced toward the end of the year due to a technical difficulty, although the amount of oil reserves is not affected.
Tullow expects to start producing oil from its Ugandan field in 2016, after receiving approval from the Ugandan government for a joint venture with Total and Chinese company CNOOC this year.
The $2.9 billion deal, which will see Tullow retain a one-third interest in the project, will significantly bolster Tullow’s balance sheet, though the impact will be included in its 2012 results.
The company expects to produce between 78,000 and 86,000 barrels of oil per day in 2012.
Speaking to The Irish Times, Tullow Oil chief executive Aidan Heavey said that while last year's strong performance was due to a combination of strong oil prices and increased production, the oil price had a greater impact on revenues rather than profit.
“While higher oil prices contribute to higher turnover, it’s also taxable. The newer fields that we’ve discovered ourselves deliver a lot more profit.”
He said Tullow would pursue a strategy of organic growth rather than growth through acquisitions.
“We have a huge number of new discoveries that still need to be developed. Only about 7 per cent of total reserves are in production. That’s a lot of fields to bring on stream and that costs money.”
He said the firm spends about $1 billion a year on exploration.
Among its priorities this year is the development of the TENS project, a cluster of fields in Ghana, a project which “could be bigger than Jubilee”, he said.
Tullow plans to submit plans to the Ghanaian government by the second half of this year, with production expected 30 months after that date.
Tullow shares, which have risen 5.7 per cent this year, gained 1.9 per cent to 1,482 pence in London. It added 44 cent to close at €17.858 in Dublin.
