Tullow Oil Plc · LSE:TLW
Tullow Oil — H1 2010 Earnings Presentation
30 slides from Tullow Oil's earnings presentation, Aug 25, 2010
Slide 1: Tullow Oil plc – 2010 Half-yearly Results
Tullow Oil plc – 2010 Half-yearly Results 25 August 2010 2010 Half-yearly Results Slide 1
Slide 2: Disclaimer
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 in light of the informa
Slide 3: Contents
Contents Section Page Introduction 4 Finance 6 Production and Development 12 Exploration 21 Conclusions 28 2010 Half-yearly Results Slide 3
Slide 4: Introduction – Aidan Heavey
Introduction – Aidan Heavey 2010 Half-yearly Results Slide 4
Slide 5: Exploration-led strategy delivering results in 2010
Exploration-led strategy delivering results in 2010 • Jubilee Phase 1 on track and progressing other Ghana developments • Significant progress made commercialising Ugandan resources • Exceptional exploration success continues with Owo • Continuing to build and strengthen exploration portfolio • Busi
Slide 6: Finance – Ian Springett
Finance – Ian Springett 2010 Half-yearly Results Slide 6
Slide 7: 2010 Half-yearly results summary
2010 Half-yearly results summary • hfghfghfhfg 1H 2010 1H 2009 Change Sales revenue $486m $439m + 11% Operating profit $124m $92m + 35% Net profit $89m $31m + 184% Basic earnings per share 9.35c 4.00c + 134% Dividend per share 2.0p 2.0p 0% Capital investment $651m $578m + 13% Cash generated from ope
Slide 8: Net income 1H 2009 v 1H 2010
Net income 1H 2009 v 1H 2010 $m 175 150 125 $71m 100 $89m $21m $4m $32m $26m $20m $21m 75 $119m 50 $31m 1H 1H 25 2009 2010 0 1H 2009 Price Volume Costs Expl Net finance Portfolio Tax IAS 39 1H 2010 write-offs fees management 1H 2010 net income impacted primarily by higher prices and lower volumes Ju
Slide 9: Sources and uses of funds
Sources and uses of funds Cash inflow $2,170m 1H 2010 Net cash inflow $1,347m (1H 2009: $229m outflow) • Operating cash flow - $317m* (1H 2009:$170m*) $m Sources Uses 2,400 • Equity placing - $1,449m (1H 2009:$565) 2,200 • Net loan drawdown $403m (1H 2009:$122m $1,449m repayment) 2,000 1,800 Cash ou
Slide 10: Significant 2010 capital expenditure
Significant 2010 capital expenditure • $1,500m forecast for 2010 Forecast 2010 $1,483m - Ghana: Jubilee phase 1 development $1,500m & Tweneboa appraisal - Uganda: exploration and basin 2009 $1,140m development - High-impact exploration: Africa & South America 2008 $720m • 2010 capital split 0 400 80
Slide 11: Creating stakeholder value
Creating stakeholder value - Ghana: Jubilee discovery Consistent and repeatable strategy & fast track development • Sustainable long term growth - Uganda: commercialisation, • Balance exploration, major projects & funding pre-emption & farmdown • Safety, environment, stakeholders & people - Growing,
Slide 12: Production & Development – Paul McDade
Production & Development – Paul McDade 2010 Half-yearly Results Slide 12
Slide 13: 1H 2010 Group production – 55,800 boepd
1H 2010 Group production – 55,800 boepd Group working interest production 1H 2010 „000s Actual production 100 Oil production 90 Gas production 80 U.K. 12,700 boepd Current production 70 Future production 60 Other licence areas boepd 50 40 Pakistan 30 100 boepd E.Guinea Mauritania 15,700 boepd 20 1,5
Slide 14: Jubilee Phase 1 – First oil remains on schedule
Jubilee Phase 1 – First oil remains on schedule Continue to deliver on all fronts • FPSO arrived in Ghana in June 2010 • On schedule for first oil Nov/Dec 2010 - FPSO risers being installed - Subsea installation c.85% complete - Well completions underway • Forecast now estimated at c.$3.35bn; within
Slide 15: Jubilee Phase 1 – Final activities underway
Jubilee Phase 1 – Final activities underway DRILLING • 100% of drilling completed • Drilling performance “best-in-class” for West Africa • 3rd well completion in progress • Interference tests confirm good reservoir continuity • Well programme to conclude in October 2011 FPSO DRILLING • Arrived on lo
Slide 16: Jubilee Phase 1 – Significant progress within Ghana
Jubilee Phase 1 – Significant progress within Ghana REGULATORY • Installation & commissioning EIA approved – December 2009 • Independent verification of FPSO Safety Case completed • Permit to operate facilities expected by October 2010 • Emergency response, oil spill plans undergoing EPA review INFR
Slide 17: Beyond Jubilee Phase 1 – Future Ghana potential
Beyond Jubilee Phase 1 – Future Ghana potential Phase 1a Jubilee Unit Area Reserves and Resources (mmbo) • Infill programme potential of 5-8 wells Phase 1 Phase 1a Phase 1b • Designed to maintain FPSO plateau 17 wells 5-8 wells 10-20 wells • Detailed work being carried out Low 250 60 160 • Sanction
Slide 18: Significant progress commercialising Ugandan resources
Significant progress commercialising Ugandan resources • E&A activity delivering material resources (9 successful wells YTD) • Tullow: CNOOC: Total (1/3:1/3:1/3) partnership agreed with GoU • Heritage Oil assets in Blocks 1&3A acquired • Finalisation of acquisition and farm-down awaiting Heritage Oi
Slide 19: Uganda – Block 2 Development (Phase 1)
Uganda – Block 2 Development (Phase 1) Extended Well Tests • On track for delivery by end 2010 • EWT equipment is in country, construction in 2H 2010 Kasamene Central Processing • Crude sales agreements to local industry progressing Kasamene Facility • EWT data will guide Kasamene and future develop
Slide 20: Delivering the next phase of production growth
Delivering the next phase of production growth Existing Production • 2010 production forecast increased to 57-58,000 boepd • Continue to maintain field performance through incremental investment Ongoing Major Developments • Jubilee first oil in Nov/Dec 2010 • Define and sanction Jubilee Phase 1a & 1
Slide 21: Exploration & Appraisal – Angus McCoss
Exploration & Appraisal – Angus McCoss 2010 Half-yearly Results Slide 21
Slide 22: 82% global exploration success rate in 1H 2010
82% global exploration success rate in 1H 2010 French Guiana Guyana Netherlands Seismic Drilling Gabon – 2 wells 1,889 sqkm 2,424 sqkm Acquisition Offshore 94 of 2,494 OMOC-N-1 3D PSDM 3D PSDM sqkm 3D Processing Onshore Noix de Coco-1 171 km 2D 1,512 sqkm 3D PSDM 2,494 sqkm 3D PSDM 678 km 2D PSD
Slide 23: Ghana programme delivering excellent results
Ghana programme delivering excellent results Four fields discovered since 2007 • Jubilee – world-class oil field under development • Odum – potential satellite development • Tweneboa – significant oil and gas-condensate field • Owo – major new light oil field discovered Active programme in 2010 to d
Slide 24: Two major discoveries from high-equity campaign
Two major discoveries from high-equity campaign Tweneboa and Owo transform Deepwater Tano • Greater Tweneboa Area comprises two major fields • Accelerated appraisal required to mature resources • Volumes being assessed post Owo-1 sidetrack Tweneboa • Major oil and gas-condensate field • Tweneboa app
Slide 25: South American campaign to commence in early 2011
South American campaign to commence in early 2011 Exploring Atlantic twin basins • Jubilee play being pursued across Atlantic • Material offshore acreage position in three countries French Guiana • Seismic completed in March 2010 • Very encouraging leads and prospects identified • First well to be d
Slide 26: Uganda - 1 billion barrels of oil discovered to date
Uganda - 1 billion barrels of oil discovered to date Milestone volume achieved • 1 Bbo discovered (P50); over 1.5 Bbo yet to find (P50) • 35 out of 36 wells successful (9 drilled in 2010) • Accelerated basin-wide E&A commenced High impact exploration success continues • Block 1 exploration re-commen
Slide 27: 6 month Exploration and Appraisal programme
6 month Exploration and Appraisal programme Country Block Prospect Interest Gross upside* Spud Date Deepwater Tano Onyina 49.95% (op) 700 mmboe Sept 2010 Ghana Deepwater Tano Tweneboa & Owo appraisal 49.95% (op) 1,400 mmboe** Q4 2010-Q1 2011 West Cape Three Teak 22.9% 200 mmboe Q4 2010 Points Butiab
Slide 28: Conclusions – Aidan Heavey
Conclusions – Aidan Heavey 2010 Half-yearly Results Slide 28
Slide 29: Exploration-led strategy delivering results in 2010
Exploration-led strategy delivering results in 2010 • Jubilee Phase 1 on track and progressing other Ghana developments • Significant progress made commercialising Ugandan resources • Exceptional exploration success continues with Owo • Continuing to build and strengthen exploration portfolio • Busi
Slide 30: Tullow Oil plc
Tullow Oil plc 3rd Floor, Building 11 Chiswick Park, 566 Chiswick High Road London, W4 5YS Tel: +44 20 8996 1000 Fax: +44 20 8994 5332 Investor Relations Contact Chris Perry: chris.perry@tullowoil.com 2010 Half-yearly Results Slide 30