Slide 1: Tullow Oil plc – 2008 Full year results
Tullow Oil plc – 2008 Full year results 11 March 2009
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 13 Exploration 21 Conclusions 31 2008 Full year results Slide 3
Slide 4: Introduction – Aidan Heavey
Introduction – Aidan Heavey 2008 Full year results Slide 4
Slide 5: People and funding in place for the next phase
People and funding in place for the next phase • Continued growth and delivery in 2008 • Funding secured to execute major projects • Material exploration and resources upside • High quality team to deliver future expansion • Well positioned to seize opportunities in current environment 2008 Full yea
Slide 6: Finance – Ian Springett
Finance – Ian Springett 2008 Full year results Slide 6
Slide 7: 2008 Full year results summary
2008 Full year results summary • hfghfghfhfg 2008 2007 Change Sales revenue £692m £639m + 8% Operating profit £300m £189m + 59% Net profit £226m £53m + 330% Basic earnings per share 30.9p 7.1p + 335% Dividend per share 6.0p 6.0p 0% Capital investment £480m £368m + 31% Cash generated from operations
Slide 8: 2008 Operational performance
2008 Operational performance Sales revenue up 8% to £692m • Production down 9% to 66,600 boepd* • Realised oil price up 17% to $73.6/bbl (2007: $62.7/bbl) • Realised gas price up 40% to 52.4p/th (2007: 37.3p/th) Gross profit up 14% to £326m • Cash operating costs £5.90/bbl* (2007: £5.05/bbl*) • Depr
Slide 9: 2008 Sources and uses of funds
2008 Sources and uses of funds Cash inflow £873m • Operating cash flow - £588m* (2007: £447m*) - Increased commodity prices, lower volumes • Disposal proceeds - £285m (2007: £336m Hardman acquisition cost) - Hewett-Bacton receipt £208m - CMS/Ngosso receipts £77m Cash outflow £686m • Cash Capex £460m
Slide 10: Focused 2009 capital budget
Focused 2009 capital budget • £480m invested in 2008 and £600m currently budgeted for 2009 • 2009 capital split 70:30 between Development and Exploration & Appraisal, heavily focussed on Ghana and Uganda • Prudent level prior to the equity placing and completion of the financing 2009 Current budget
Slide 11: Financial strategy
Financial strategy Prepared for downturn in 2008/2009 • Ensured control of Capex and Opex • Active portfolio management - £285m proceeds • Set a prudent 2009 capital budget of £600m Strengthened balance sheet • Write down and impairment of non-core assets - £253m • Successful equity placing raised £
Slide 12: Disciplined financial strategy and strong 2009 outlook
Disciplined financial strategy and strong 2009 outlook • Strong balance sheet and funding in place to - Bring world class Jubilee field into Phase 1 production 2H 2010 - Develop ever growing discoveries and prospects in Lake Albert region - Support high impact drilling campaigns • Reviewing drill ca
Slide 13: Production and Development – Paul McDade
Production and Development – Paul McDade 2008 Full year results Slide 13
Slide 14: Production and Development highlights
Production and Development highlights • Record EHS performance in 2008 despite increased activity • Significant upgrade to reserves and resources • Jubilee Phase 1 on track for 2H 2010 first oil • Phased basin-wide plan to develop Ugandan resources • Focus on capital and cost management in current e
Slide 15: Reserves and Resources increased to 825 mmboe
Reserves and Resources increased to 825 mmboe Working interest production • 2008 averaged 66,600 boepd • 2009 forecast of 60,000 boepd Reserves and Resources • Commercial reserves - 314 mmboe • Contingent resources - 511 mmboe • Three year reserves replacement – 226% Significant upgrades in Ghana &
Slide 16: World-class developments offshore Ghana
World-class developments offshore Ghana Ghana overview • Jubilee field discovery – June/August 2007 • Odum discovery – February 2008 • Tweneboa discovery – March 2009 Jubilee field • Four appraisal wells confirm giant discovery • Exceptional reservoir and fluid properties • Gross resource potential
Slide 17: Jubilee Phase 1 – on track for first oil 2H 2010
Jubilee Phase 1 – on track for first oil 2H 2010 Jubilee development concept • Simultaneous appraisal and development • Phased approach - accelerate first oil, manage uncertainty • Phase 1 - FPSO & subsea development Phase 1 scope • Production capacity - 120,000 bopd • Water injection - 230,000 bwpd
Slide 18: Sufficient Ghana rig capacity
Sufficient Ghana rig capacity Jubilee development drilling • Eirik Raude - contracted for 3–5 years • Plan to complete existing wells - H1, H2, M1, M2 • J4 development well underway • 17 wells planned (9 prod, 5 water inj, 3 gas inj) Exploration & appraisal drilling • Aban Abraham – Q2/Q3 2009 (2 sl
Slide 19: Basin-wide Lake Albert development plan
Basin-wide Lake Albert development plan Boepd Multi billion barrel basin potential 100,000 • Significant resources already discovered • Major onshore and offshore prospects still to be drilled 10,000 Basin-wide development • Development concepts under review 1000 Regional & Beyond • Phased developme
Slide 20: Driving efficiency across the portfolio
Driving efficiency across the portfolio 2009 budgeted Capex Cost management c.£120m • New demand environment for oil services Rest of c.£400m Ghana and Africa • Rig and service costs beginning to fall Uganda • Pro-active approach to capturing this value potential c.£80m ROW 2009 budgeted Producing a
Slide 21: Exploration – Angus McCoss
Exploration – Angus McCoss 2008 Full year results Slide 21
Slide 22: 77% global exploration & appraisal success rate in 2008
77% global exploration & appraisal success rate in 2008 UK Mauritania 1 well 3 wells Portugal 2 Doris 3 Banda NW 282 km 2D 3300 km 2D 3 Banda E India 2 Khop 3 well 411 sq km 3D 2 C1 2 G1 2 F1 Senegal 624 sq km 3D Bangladesh 252 sq km 3D Guyana 2,334 sq km 3D Uganda 2008 10 wells • 17/22 wells succes
Slide 23: Ghana upside potential being realised – 100% success
Ghana upside potential being realised – 100% success Exploratory appraisal in Jubilee • Gross resource potential expanded to 600 – 1,200 – 1,800 mmbo • Large continuous accumulation confirmed • Exceptional field characteristics reaffirmed • Significant associated gas resources ~800bcf • Appraisal we
Slide 24: Tweneboa-1 discovers another field in the Jubilee play
Tweneboa-1 discovers another field in the Jubilee play Significant breakthrough • Major light hydrocarbon discovery • Near single-phase gas-oil fluid • Gross resource potential • 50 - 250 - 1,400 mmboe • 30%-40% liquids (based on Tweneboa-1) • Another field in the Turonian Jubilee play • Located 25
Slide 25: Upside potential throughout Equatorial Atlantic region
Upside potential throughout Equatorial Atlantic region Jubilee play follow-on strategy • Capitalising on knowledge of working plays • Aim to repeat transformational performance • Building strong acreage position • Leveraging expertise built • Operational synergies maximised • Forming strategic regio
Slide 26: Atlantic twin basins in South America
Atlantic twin basins in South America French Guiana – Guyane Maritime licence • Prospective Jubilee stratigraphic-trap analogues identified on Eastern Slope • Billion barrel potential in giant Matamata prospect further supported by basin modelling • Plan to leverage 3D seismic & dilute high equity p
Slide 27: Uganda commercial threshold volumes discovered
Uganda commercial threshold volumes discovered 100% success rate in Lake Albert Rift Basin • 20 wells drilled so far – all found oil & gas • 10 drilled successfully in 2008 • 600 mmbo discovered resources • Basin potential significantly beyond 1bn barrels Kingfisher • Appraisal confirms around 200 m
Slide 28: Butiaba breakthrough – world-class oil play found
Butiaba breakthrough – world-class oil play found Escarpment play • Proved integrity of traps against rift margin • Taitai-1 & Karuka-1 demonstrate traps charged • Moderate reservoir quality close to rift margin Victoria Nile Delta play • Kasamene-1 heralds exploration breakthrough • Thick high-qual
Slide 29: High-potential follow-up in Butiaba cascades
High-potential follow-up in Butiaba cascades Kasamene-Buffalo success • Kasamene-1 breakthrough reveals #1 play • Play pursued along cascades • Warthog success confirms trend • Buffalo-Giraffe adds massive 300 mmbo Nsoga-Leopard cascade potential • To be drilled in 2009 • Shares attributes of Kasame
Slide 30: Exploration programme
Exploration programme Country Block Prospect Interest Gross upside Spud Date Ghana Deep Water Tano Tweneboa 49.95% (op) 1,400 mmboe Q1-Q4 2009 Ghana WCTP Mahogany Appraisal 22.90% 600 mmbo Q2-Q3 2009 Ghana WCTP Teak complex 22.90% 350 mmboe Q4 2009 Uganda Block 2 Butiaba Campaign '09 100% (op) 1,000
Slide 31: Conclusions – Aidan Heavey
Conclusions – Aidan Heavey 2008 Full year results Slide 31
Slide 32: People and funding in place for the next phase
People and funding in place for the next phase • Continued growth and delivery in 2008 • Funding secured to execute major projects • Material exploration and resources upside • High quality team to deliver future expansion • Well positioned to seize opportunities in current environment 2008 Full yea
Slide 33: 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 2008 Full year results Slide 33