Tullow Oil Plc · LSE:TLW
Tullow Oil — FY2011 Earnings Presentation
39 slides from Tullow Oil's earnings presentation, Mar 14, 2012
Slide 1: 2011 Full Year Results
2011 full year results Tullow Oil plc 14 March 2012
Slide 2: Disclaimer
2011 full year results Disclaimer This presentation contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst Tullow believes the expectations reflected herein to be reasonable
Slide 3: Contents
2011 full year results Contents Section Page Introduction 4 Finance 6 Development and Operations 14 Exploration and Appraisal 22 Conclusions 37 Slide 3
Slide 4: Introduction – Aidan Heavey
2011 full year results Tullow Oil plc – 2011 full year results Introduction – Aidan Heavey
Slide 5: Positioned to deliver next stage of growth
2011 full year results Positioned to deliver next stage of growth • Jubilee production drives record financial results • Uganda farmdown transforms the balance sheet • Exploration opens third major new basin • Appraisal success drives TEN development towards sanction • Material new acreage positions
Slide 6: Finance – Ian Springett
2011 full year results Tullow Oil plc – 2011 full year results Finance – Ian Springett
Slide 7: Creating shareholder value
2011 full year results Creating shareholder value • High-impact exploration portfolio Consistent and repeatable strategy • Ghana; Jubilee production, • Sustainable long term value growth progressing TEN project • Balance exploration, major projects & funding • Uganda: farm-down completed; new partne
Slide 8: 2011 full year results summary
2011 full year results 2011 full year results summary 2011 2010 Change Sales revenue 2,304 1,090 +111% Operating profit 1,132 262 +332% Net profit 689 90 +670% Basic earnings per share 72.5 8.1 +795% Dividend per share 12.0 6.0 +100% Capital investment1 1,432 1,235 +16% Cash generated from operation
Slide 9: Net income 2011 v 2010
2011 full year results Net income 2011 v 2010 $m 1,500 1,250 $165m $501m $213m 1,000 $34m $27m 750 $294m $54m 500 $711m $689m 250 $90m 0 Net Income up 670%; higher prices and production volumes partially offset by related cost and tax increases. Slide 9
Slide 10: Revenue 2011 vs 2010
2011 full year results Revenue 2011 vs 2010 2011 - $2,304m 2010 - $1,090m $202m $339m Other $218m Europe Europe $21m Asia $930m Ghana $373m Eq. Guinea $307m $342m Gabon Eq. Guinea $447m $194m Gabon $21m Other Asia 2011 Revenues increased by 111%; production from the Jubilee field and higher commodit
Slide 11: Sources and uses of funds
2011 full year results Sources and uses of funds $m 2011 Net cash outflow $31m Cash inflow $2,870m 3,250 • Operating cash flow $1,903m* (2010:$818m*) Sources Uses $87m $172m • Net loan drawdown $880m (2010:$886m) 2,750 $297m • Share proceeds $87m - Ghana share issue $880m 2,250 $374m Cash outflow $2
Slide 12: 2011 capital expenditure
2011 full year results 2011 capital expenditure • $1,990m for 2012 – Ghana: Jubilee remediation and phase 1A & 2012 $700m $300m $990m $1,990m TEN developments – Uganda: Lake Albert – Other Africa: WATM, Kenya – ROW: South America, Europe 2011 $701m $335m $396m $1,432m • 2011 capital split: – >57% Gh
Slide 13: Strong balance sheet; Financed to deliver next stage of growth
2011 full year results Strong balance sheet; Financed to deliver next stage of growth • Record results and Uganda farmdown have transformed Tullow’s financials • Strong, well funded balance sheet - Significant unused debt facilities - Step change in ongoing operational cash flow • Significant value
Slide 14: Development and Operations – Paul McDade
2011 full year results Tullow Oil plc – 2011 full year results Development and Operations – Paul McDade
Slide 15: Commercialising Reserves and Resources
2011 full year results Commercialising Reserves and Resources 2000 Reserves and Resources 1,743 mmboe 1800 Contingent Resources • Commercial reserves - 298 mmboe 1600 Commercialised 1400 Commercial Reserves • Contingent resources - 841 mmboe − 2011 additions - 235 mmboe mmboe 1200 1000 • Uganda reso
Slide 16: Strong production growth in 2011
2011 full year results Strong production growth in 2011 Group working interest production North Sea Current production Oil production boepd (x000) 100 20 Future production Africa Ghana Asia Europe 16 Other licence areas Gas production 12 80 8 Pakistan Bangladesh 4 boepd (x000) boepd (x000) 16 16 60
Slide 17: Jubilee – the next stage of development
2011 full year results Jubilee – the next stage of development Jubilee Phase 1 activity continues • Current performance: − Oil production at c.70,000 bopd − > 30m barrels (30 cargos) safely produced & exported − Water or gas injection support seen at all wells − FPSO purchased end 2011; over 95% upt
Slide 18: TEN – POD submission expected in Q3 2012
2011 full year results TEN – POD submission expected in Q3 2012 Appraisal and testing supports field commerciality • Appraisal drilling confirms oil at Ntomme-2A • Successful Owo-1 flow test: combined rates of 20,000 bopd • Successful Tweneboa-2 & 4 flow tests • Final appraisal well Enyenra-4 curren
Slide 19: Uganda – next phase of activity
2011 full year results Uganda – next phase of activity Farmdown deal completed • MoU & SPAs signed in March 2011 • New PSA’s signed by the GoU in February 2012 • $2.9bn farmdown completed in February 2012 Partnership poised for delivery • Operating framework and JV structure agreed • Tullow: CNOOC:
Slide 20: Significant development investment activity in 2012
2011 full year results Significant development investment activity in 2012 Current development activities • Gabon - Onshore infill drilling continues at Niungo, Echira and Onal fields 2012 D&O capex spend - Offshore 3 well development campaign at Tchatamba, Turnix & Limande • Equatorial Guinea Rest
Slide 21: Progress to commercialise resources continues in 2012
2011 full year results Progress to commercialise resources continues in 2012 • Uganda resources commercialised through sale; focus now on development • Building Jubilee production through Phase 1 remediation and Phase 1A • TEN project progressing towards PoD submission in Q3 2012 • Development portf
Slide 22: Exploration and Appraisal – Angus McCoss
2011 full year results Tullow Oil plc – 2011 full year results Exploration and Appraisal – Angus McCoss
Slide 23: 74% global E&A success ratio in 2011
2011 full year results 74% global E&A success ratio in 2011 UK – 2 wells NETHERLANDS – 1 well Seismic Key 83% success rate in 2010 Cameron (44/19b-7) Foxtrot (49/30b-10) 1,660 sq km 3D PSDM Muscovite-1 (E16-5) 87% success rate in 2009 Acquisition Airborne Surveys 77% success rate in 2008 Proce
Slide 24: Exploration campaigns gather momentum over next 12 months
2011 full year results Exploration campaigns gather momentum over next 12 months North Atlantic Exploration Studies & Business Development Central Atlantic Major Exploration East African Rift Basins Campaign Launched (~20 E&A wells) Uganda follow on Mauri-Tano Trend (~15 E&A wells) Jubilee Play Guya
Slide 25: Exploration enterprise – value creation and monetisation
2011 full year results Exploration enterprise – value creation and monetisation Development & Operations Exploration Major Projects Core Campaigns Appraisal Business Basin Entry Discovery & follow-up • Ghana drill-out & appraisal Development • Guyanas Transform • Uganda drill-out & appraisal Incubat
Slide 26: Multiple exploration campaigns in East Africa in 2012
2011 full year results Multiple exploration campaigns in East Africa in 2012 East African Rift Basins • Lake Albert Rift Basin in Uganda − 1.1 Bbo discovered − High impact West of Nile & Kanywataba campaigns − Accelerated appraisal in support of basin development • Kenya – Ethiopia Rift Basins − Sev
Slide 27: High impact E&A campaign under way in Uganda
2011 full year results High impact E&A campaign under way in Uganda • High impact West of Nile campaign targets a cascade of prospects from Omuka to Raa • Accelerated appraisal in support of basin development targets material undrilled fault blocks and field limits Slide 27
Slide 28: Kenya-Ethiopia Rift Basins – pioneering exploration
2011 full year results Kenya-Ethiopia Rift Basins – pioneering exploration • Regional FTG gravity survey and ongoing 2D seismic campaign reveals scores of leads • High impact drilling campaign commenced - Ngamia-1 wildcat currently drilling to calibrate basin Slide 28
Slide 29: Transatlantic nature of Jubilee play proven
2011 full year results Transatlantic nature of Jubilee play proven • Jubilee follow-up exploration uses high-quality 3D seismic throughout Equatorial Atlantic • Exploration drilling campaigns target prospectivity in West Africa and South America • High impact wells currently being drilled in Côte d’
Slide 30: Pursuing appraisal opportunities in West Cape Three Points
2011 full year results Pursuing appraisal opportunities in West Cape Three Points Positive E&A results in 2011 Continuing momentum in 2012 • West Cape Three Points exploration drill-out achieved • Teak-4 to be drilled 2012 targeting stratigraphic upside • Teak-1 makes important discovery in 5 reserv
Slide 31: High impact exploration in Deepwater Tano
2011 full year results High impact exploration in Deepwater Tano Successful appraisal programme continues • Appraisal programme nearing completion • Tweneboa-3 confirms rich gas-condensate • Ntomme-2A encounters 125 metre oil column • Owo-1 re-drill tested at 20,000 bopd • Enyenra-4 currently drilli
Slide 32: Extending the Jubilee play west of Ghana
2011 full year results Extending the Jubilee play west of Ghana Côte d’Ivoire Sierra Leone & Liberia • High quality 3D seismic covers acreage • Large Late Cretaceous fans mapped • Large Jubilee-type fans mapped • Sierra Leone equity increased from 10% to 20% • Multiple prospects matured for drilling
Slide 33: Building an extensive operated portfolio in Mauritania
2011 full year results Building an extensive operated portfolio in Mauritania Initial focus on oil exploration • Encouraging core play diversity − Stratigraphic Traps − Salt Basins − Carbonates • Late Cretaceous turbidites are the initial exploration focus in Mauritania-Senegal Basin • Cormoran-1 in
Slide 34: Basin-opening discovery made with Zaedyus-1 well
2011 full year results Basin-opening discovery made with Zaedyus-1 well • Cingulata Fan System offshore French Guiana tested by Zaedyus-1 wildcat (GM-ES-1) − 72m of net oil pay discovered; sidetrack drilled to gather core data − Zaedyus appraisal well to spud mid year with DST and second wildcat to
Slide 35: 12 month Exploration and Appraisal programme
2011 full year results 12 month Exploration and Appraisal programme mmboe Country Block Prospect Interest Mean Gross Upside * Spud Date WEST & NORTH AFRICA CI-105 Kosrou-1 22.37% 265 650 In progress Côte d’Ivoire CI-103 Paon-1 45% (op) 205 500 Q2 2012 Gabon Kiarsseny Gnondo-1 52.78% (op) 40 90 Q4 20
Slide 36: 12 month Exploration and Appraisal programme (cont.)
2011 full year results 12 month Exploration and Appraisal programme (cont.) mmboe Country Block Prospect Interest Mean Gross Upside* Spud Date EUROPE, SOUTH AMERICA & ASIA K8 K8-FC-W (308) 9.95% 3 5 Top hole drilled The Netherlands L13 Sigma-1 9.95% 10 15 Q3 2012 E11 Vincent-1 30% (op) 20 40 Q4 2012
Slide 37: Conclusions – Aidan Heavey
2011 full year results Tullow Oil plc – 2011 full year results Conclusions – Aidan Heavey Slide 37
Slide 38: Financially strong and opportunity rich
2011 full year results Financially strong and opportunity rich • Jubilee production delivers record financial results • Uganda farmdown transforms the balance sheet • Exploration opens third major new basin • Appraisal success drives TEN development towards sanction • Material new acreage positions
Slide 39: Tullow Oil plc
2011 full year results Tullow Oil plc 9 Chiswick Park 566 Chiswick High Road London, W4 5XT United Kingdom Tel: +44 (0)20 3249 9000 Fax: +44 (0)20 3249 8801 Follow Tullow on: Email: chris.perry@tullowoil.com