Tullow Oil Plc · LSE:TLW
Tullow Oil — Investor Presentation (January 2018)
28 slides from Tullow Oil's investor presentation, January 2018
Slide 1: Overview Presentation
Overview presentation Tullow Oil plc OVERVIEW PRESENTATION January 2018
Slide 2: Disclaimer
Overview presentation 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 i
Slide 3: Introduction
Overview presentation Tullow Oil plc – Overview presentation INTRODUCTION
Slide 4: A Leading Global Independent Exploration & Production Company
Overview presentation A LEADING GLOBAL INDEPENDENT EXPLORATION & PRODUCTION COMPANY Established record of delivering successes • The business has developed organically and through acquisitions since 1985 Diversified world-class asset base • Focus on Africa and South America • Over 85 licences across
Slide 5: Production & Development Asset Base
Overview presentation PRODUCTION & DEVELOPMENT ASSET BASE TEN field East Africa Development • First oil achieved in August 2016 • Estimated 750mmbo mean • FPSO gross capacity of 80,000 bopd resource (net WI ~35,000 bopd) • Gross production of 56,000 bopd in 2017; forecast of 64,000 bopd in 2018 West
Slide 6: A Balanced E&P Business Focused on Returns
Overview presentation A BALANCED E&P BUSINESS FOCUSED ON RETURNS Business foundations Disciplined approach Future value generation Highly experienced Monetisation team Maximising revenue Proven operating from production capability Enhance & replenish Portfolio portfolio Low-cost production managemen
Slide 7: Well Positioned for the Future
Overview presentation WELL POSITIONED FOR THE FUTURE Strong business foundations Delivering shareholder returns Experienced, broader Disciplined investment focused management team on returns High-quality, low-cost asset Enhancing & replenishing base with growth potential asset base Selective high-im
Slide 8: Financials
Overview presentation Tullow Oil plc – Overview presentation FINANCIALS
Slide 9: Financial Strategy Built on Firm Foundations
Overview presentation FINANCIAL STRATEGY BUILT ON FIRM FOUNDATIONS Financial foundations Disciplined approach Future value generation Strong team with key relationships Minimum $0.5bn Strong balance sheet Re-set business with liquidity headroom a low cost base Delivering significant Prudent debt cas
Slide 10: A Step Change in Net Debt and Gearing in 2017
Overview presentation A STEP CHANGE IN NET DEBT AND GEARING IN 2017 Gearing reduced to <3x – approaching policy target Net debt $4.8bn Significant progress made 5.1x • Net debt reduced by $1.3bn • Reduced gearing further supported by: Net debt - Equity proceeds of $0.7bn $3.5bn - Free cash flow of $
Slide 11: Balance Sheet, Debt Profile and Liquidity
Overview presentation BALANCE SHEET, DEBT PROFILE AND LIQUIDITY $bn 5 Committed Debt Drawings Liquidity • $1bn facility headroom and free cash at Facilities YE18 0.6 3 • No material near term debt maturities Headroom and free cash: • Minimum $0.5bn headroom going forward 4 0.1 0.2 RBL • $2.5bn refin
Slide 12: Hedging Strategy
Overview presentation HEDGING STRATEGY Prudent approach provides significant benefits to the business • Tullow has proactively hedged production to protect revenues over the last 10 years • Significant liquidity benefit through protecting future revenues and preserving RBL debt capacity • Cumulative
Slide 13: Considerable Capex Flexibility
Overview presentation CONSIDERABLE CAPEX FLEXIBILITY Disciplined capital allocation • Capital allocated to strike the right balance between deleveraging and growth • All investment screened against strict commercial and technical criteria • Minimise commitments to maximise flexibility in response to
Slide 14: Capital Allocation
Overview presentation CAPITAL ALLOCATION 1000 Ghana 2017 Capex of c.$0.25 billion1 West Africa non-op (incl Europe) 800 Exploration 2018 Capex guidance of c.$0.5 billion1 Kenya Uganda (to be offset by • Ghana: c.$250m farm-down) 600 • West Africa non-operated: c.$40m • Kenya pre-development spend: c
Slide 15: Foundations for Growth
Overview presentation FOUNDATIONS FOR GROWTH Actual and forecast future oil production Good progress made in 2017 Ghana • On a pathway to <2.5x gearing 150 Jubilee BI insurance • Sustained cost reductions CWA 125 Future estimated potential production • Ongoing capex flexibility kbopd 100 Considerabl
Slide 16: West Africa
Overview presentation Tullow Oil plc – Overview presentation WEST AFRICA
Slide 17: West Africa – Cash Generating Production Business
Overview presentation WEST AFRICA – CASH GENERATING PRODUCTION BUSINESS Business fundamentals • Material production base from Ghana • Low operating costs, targeting c.$8/bbl • Significant resource base underpins future production Reaching full production potential • TEN production optimisation deliv
Slide 18: East Africa
Overview presentation Tullow Oil plc – Overview presentation EAST AFRICA
Slide 19: East Africa – Discoveries Leading to Material Production
Overview presentation EAST AFRICA – DISCOVERIES LEADING TO MATERIAL PRODUCTION Business fundamentals • Over 2 billion bbls of resources discovered • Low-cost material resource developments • Track record of monetisation Progressing developments • Working towards Uganda deal completion and FID in the
Slide 20: New Ventures
Overview presentation Tullow Oil plc – Overview presentation NEW VENTURES
Slide 21: New Ventures – Value Generating Exploration Portfolio
Overview presentation NEW VENTURES – VALUE GENERATING EXPLORATION PORTFOLIO Business fundamentals • Approach focused on building value • Oil-focused acreage in known geology & geographies • Strict commercial and technical screening of prospects High-impact exploration opportunities • Lessons learnt
Slide 22: Appendix
OIZEL OT. Tullow Oil plc - 2017 Half Year Results APPENDIX TULLOW is
Slide 23: Exploration & Appraisal Activity in 2017
Overview presentation EXPLORATION & APPRAISAL ACTIVITY IN 2017 JAMAICA MAURITANIA KENYA Walton Morant (100%) C3 (90%), C-10 (76.5%) Block 12A (50%) 2D Seismic 3D Seismic 2D Seismic Block 10BB/13T (50%) 3D Seismic CÔTE D’IVOIRE South Lokichar Basin (50%) SURINAME E&A programme Explortation Block 54 (
Slide 24: New Ventures: Campaigns Focused on Long-Term Value
Overview presentation NEW VENTURES: CAMPAIGNS FOCUSED ON LONG-TERM VALUE Commercial screening Off-limits Exploration Tested at $50/bbl Ultra-deepwater Low cost of supply Value accretive Deepwater gas High margin oil Shale oil Arctic Capital & risk screening Onshore rifts East Africa light oil Over-h
Slide 25: South America: High-Impact Prospects
Overview presentation SOUTH AMERICA: HIGH-IMPACT PROSPECTS • Jamaica: Interpreting new 2D seismic data; 3D seismic survey planned for 2018 • Guyana: attractive acreage up-dip of Liza-1 oil discovery; acquired 3D seismic in 2017 • Suriname: low-cost offshore oil plays; Araku-1 wildcat drilled in Q4 2
Slide 26: Guyana-Suriname: Excellent Position in New Oil Province
Overview presentation GUYANA-SURINAME: EXCELLENT POSITION IN NEW OIL PROVINCE Suriname: • Araku-1 in Suriname drilled in Q4 2017 ($11m net to Tullow, Operator 30%) • No commercial discovery made but presence of gas condensate de-risks deeper plays Guyana: • 3D seismic programme completed in 2017; da
Slide 27: Africa: High-Impact Leads and Prospects
Overview presentation AFRICA: HIGH-IMPACT LEADS AND PROSPECTS • Mauritania: exploration focus shifted to low-cost shelf-edge oil plays, 3D seismic acquired in 2017 • Zambia: extension of East African Rift Basin Play; High Gravity survey completed in October 2017 • Namibia: material turbidite oil pla
Slide 28: Tullow Oil plc
Overview presentation Tullow Oil plc 9 Chiswick Park 566 Chiswick High Road London, W4 5XT Follow Tullow on: United Kingdom Tel: +44 (0)20 3249 9000 Fax: +44 (0)20 3249 8801 Email: ir@tullowoil.com Web: www.tullowoil.com Slide 28