Tullow Oil’s Share Price Fell 2.24% on Weaker FY 2023 Profits

The Tullow Oil plc (LON: TLW) share price fell 2.24% after its 2023 full-year results were released. The group reported that its oil and gas production under working interest averaged 62.7 thousand barrels of oil equivalent per day (kboepd), an increase from 61.1 kboepd in 2022.

The oil company’s total revenue reached $1,634 million, a decrease from $1,783 million in the previous year, attributed to an approximately 12% decrease in the post-hedge oil price realised at $77.5 per barrel, down from $88.0 per barrel in 2022.

Tullo Oil’s adjusted earnings before interest, taxes, depreciation, amortisation, and exploration expenses (EBITDAX) were $1,151 million, down from $1,469 million, with a gross profit of $765 million, down from $1,086 million. 

The company reported a loss of $110 million after-tax, shifting from a $49 million profit after tax the previous year, mainly due to impairments and write-offs of $435 million, up from $391 million.

The company generated $170 million in free cash flow, exceeding expectations despite increased capital expenditures to $380 million from $354 million and decommissioning expenses of $67 million, down from $72 million.

Net debt was reduced to $1,608 million at year-end from $1,864 million, with net debt to adjusted EBITDAX at 1.4 times, slightly up from 1.3 times. The liquidity headroom stood at $1,000 million, slightly down from $1,055 million.

A significant advancement in the refinancing strategy was achieved with a new $400 million debt facility from Glencore, with a five-year term, to manage liabilities of senior notes due in March 2025.

The commencement of the Jubilee South East major infrastructure project significantly increased production at the Jubilee field, exceeding 100,000 barrels of oil per day (bopd) gross. The company reported strong operational performance in Ghana, with seven Jubilee wells coming online and facilities uptime around 96%.

Revenue of approximately $30 million was realised from the commercialisation of associated gas from Jubilee under an Interim Gas Sales Agreement.

Rahul Dhir, Tullow Oil plc’s CEO, commented: “2023 was a year of significant achievements, including the start-up of Jubilee South East that delivered material production growth from our core operated field, a new revenue stream established from the sale of Ghana associated gas; and reserves growth in Gabon through licence extensions. We also generated free cash flow ahead of expectations despite a lower year-on-year realised oil price and demonstrated our ability to access long-term capital through the $400 million debt facility agreement with Glencore.”

Tullow Oil share price. 

The Tullow Oil share price fell 2.24% to trade at 27.54p from Tuesday’s closing price of 28.17p.