In This Article:
Release Date: March 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Tullow Oil PLC (TUWLF) successfully completed a 4D seismic campaign ahead of schedule and under budget, enhancing their understanding of reservoir dynamics.
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The company achieved a significant reduction in net debt, down by $1.8 billion since the end of 2019, with expectations to further reduce it to $1 billion by the end of 2025.
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Operational improvements were noted, with top quartile facility uptime in 2024, achieving 97% at TEN and 98% at Jubilee.
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Tullow Oil PLC (TUWLF) announced the disposal of its Gabon business for $300 million, which will accelerate deleveraging efforts.
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The company is on track to eliminate non-routine flaring by the end of the year, contributing to its net-zero commitments.
Negative Points
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Production challenges were faced in Jubilee in the second half of 2024, leading to a reserve write-down.
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The company experienced a steeper than expected production decline in 2024 due to water injection performance issues.
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Organic free cash flow for 2025 is guided at $100 million, a decrease from the previous year, impacted by delayed gas payments in Ghana.
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The company is still in the process of resolving tax arbitrations with the government of Ghana, with formal hearings scheduled for later in the year.
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Tullow Oil PLC (TUWLF) revised down its reserves due to increased water cuts, indicating inefficiencies in water sweep from injectors to producers.
Q & A Highlights
Q: Is it fair to say that the recent Gabon asset sale is the last of near-term disposals, or might you consider reducing your interest in Ghana assets? Also, could you provide more detail on the timing and potential quantum of a 2C to 2P conversion in Ghana following the 4D seismic data? A: We are open to realizing value from non-core assets if valuations are attractive. Regarding the 2C to 2P conversion, we expect a reserves uplift from the artificial gas lift project by the end of this year. The 4D seismic data will be available mid-year, and we aim to book reserves over the next couple of years as opportunities mature. Richard Miller, CFO and Interim CEO
Q: With the sale of Gabon assets, is inorganic expansion off the table until the balance sheet is stabilized? Also, what is the status of refinancing the 2026 bonds? A: Our focus is on growing reserves, maximizing production, and completing refinancing. Inorganic expansion is not a priority until we stabilize the balance sheet. Refinancing plans are well-progressed, with discussions ongoing with private capital providers. The Gabon sale will reduce the refinancing requirement significantly. Richard Miller, CFO and Interim CEO