Tullow posts fourfold increase in earnings

Listed exploration group Tullow Oil, which has major projects in Ghana and Uganda, posted a fourfold increase in earnings last year on higher oil and gas prices.

Net income was £223.2 million or 30.49 pence a share, compared with £50.9 million pounds, or 6.96 pence in 2007.

Revenue rose 8 per cent over the year to £692 million from £639 million in 2007 while operating profit was up 59 per cent to £300 million from £189 million.

Profit before tax grew 162 per cent from £114 million in 2007 to £299 million last year, the group said.

Oil and gas production fell 9 per cent to 66,600 barrels of oil equivalent a day, primarily as a result of natural decline in mature fields and deferred production due to the re-allocation of capital to development projects and high impact exploration.

During the year, the company made 17 discoveries at 22 wells. It also  wrote off £253 million on exploration.

Last year the company's headcount rose by 46 per cent from 370 people to 540.

Phase 1 of Tullow's Jubilee field development in Ghana is on track for first oil in 2010, just three years after the initial discovery well in 2007. The Jubilee field has resource potential of up to 1.8 billion barrels of oil, according to the group.

The company said that given the current economic climate, it expects challenging times in 2009 following what it called an 'outstanding year' in 2008.

"We have had our best year ever in 2008, when unprecedented success with the drill bit was matched by material progress towards the development of two major new oil provinces. We have delivered record results and significantly increased our resource base," said chief executive Aidan Heavey.

"Looking ahead, Tullow has the right people and funding in place to continue to develop our world-class assets and deliver strong and sustainable returns for shareholders. We've made a strong start in 2009 and it promises to be an exciting and challenging year. Overall we're in excellent shape to deliver the Group's next phase of growth," he added.

On Monday the company said it had raised €2 billion in loans to fund developments.

It also announced a 'significant' discovery at the Tweneboa-1 exploration well off the shore of Ghana.