Tullow Oil Plc · LSE:TLW
Tullow Oil — FY2009 Earnings Presentation
35 slides from Tullow Oil's earnings presentation, Mar 10, 2010
Slide 1: Tullow Oil plc – 2009 Full year results
Tullow Oil plc – 2009 Full year results 10 March 2010 2009 Full year 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 13 Exploration 23 Conclusions 33 2009 Full year results Slide 3
Slide 4: Introduction – Aidan Heavey
Introduction – Aidan Heavey 2009 Full year results Slide 4
Slide 5: A company transformed
A company transformed • World class developments in Ghana and Uganda - Jubilee Phase 1 on track; first oil Q4 2010 - Uganda farmdown and accelerated development • Focus remains on material exploration and resources upside • Strengthened balance sheet; debt and equity placings • High quality team • W
Slide 6: Finance – Ian Springett
Finance – Ian Springett 2009 Full year results Slide 6
Slide 7: Tullow is well positioned for further growth
Tullow is well positioned for further growth Consistent and repeatable strategy - Ghana: Jubilee discovery & fast track development • Sustainable long term growth - Uganda: commercialisation, • Balance exploration, major projects & funding pre-emption & farmdown • Safety, environment, stakeholders &
Slide 8: 2009 Full year results summary
2009 Full year results summary • hfghfghfhfg 2009 2008 Change Sales revenue £582m £692m - 16% Operating profit £95m £300m - 68% Net profit £19m £226m - 92% Basic earnings per share 1.9p 30.9p - 94% Dividend per share 6.0p 6.0p 0% Capital investment £758m £480m + 58% Cash generated from operations 1
Slide 9: Net income 2009 v 2008
Net income 2009 v 2008 £m 275 250 £226m 225 200 £60m £174m 175 150 £42m £231m 125 £39m 100 75 £71m £80m 50 £19m 25 0 2008 Price Volume Costs Expl Portfolio Tax IAS 39 2009 Write-offs Mgmt. 2009 Net income impacted primarily by lower prices, volumes & one-offs Jubilee set to transform 2011 results 20
Slide 10: Sources and uses of funds
Sources and uses of funds Cash inflow £905m 2009 Net cash outflow £113m (2008: £187m inflow) £m • Operating cash flow - £299m* (2008:£588m*) 1100 Sources Uses - Lower UK gas prices and volumes 1000 £119m • Disposal proceeds - £6m (2008:£285m) 900 - Final Hewett-Bacton net receipt £2m £208m £142m - C
Slide 11: Significant 2010 capital expenditure
Significant 2010 capital expenditure • £990m forecast for 2010 Forecast 2010 - Ghana: Jubilee phase 1 development £990m & Tweneboa appraisal - Uganda: exploration and basin 2009 £760m development - High-impact exploration: Africa & South America 2008 £480m • 2010 capital split: 0 200 400 600 800 100
Slide 12: Implementation of financial strategy
Implementation of financial strategy Selective capital Efficient Maintain strong, investment in key well funded balance portfolio development projects to sheet management maximise value Invest for exploration-led value growth 2009 Full year results Slide 12
Slide 13: Production & Development – Paul McDade
Production & Development – Paul McDade 2009 Full year results Slide 13
Slide 14: 2009 Group production – 58,300 boepd
2009 Group production – 58,300 boepd Group working interest production 100 Oil production 90 Gas production 80 U.K. 14,450 boepd Current production 70 Future production 60 Other licence areas boepd 50 40 Pakistan 30 300 boepd E.Guinea Mauritania 15,100 boepd 20 2,050 boepd 10 Gabon 12,000 boepd 0 Ba
Slide 15: End 2009 Reserves and Resources - mmboe
End 2009 Reserves and Resources - 894 mmboe 1000 Contingent Reserves and Resources 894 mmboe 900 Resources Commercial - Commercial reserves 300 mmboe 800 Reserves - Contingent resources 594 mmboe 700 600 • Potential to migrate significant Ghana & Uganda resources to Commercial mmboe 500 Reserves in
Slide 16: Jubilee Phase 1 – a new deepwater benchmark
Jubilee Phase 1 – a new deepwater benchmark On schedule and within budget • First oil on schedule for Q4 2010 • Costs remain within original budget of $3.1bn • EIA approved in December 2009 • Local infrastructure and resources on track • EHS performance exceeding targets Production ramp up • Product
Slide 17: Jubilee Phase 1 – project delivery on schedule
Jubilee Phase 1 – project delivery on schedule DRILLING • 13 new wells now drilled & 3 wells will be re-used • >20 kbwpd injection test; communication seen over 6 km • ~50% of drilling & completion schedule complete • Well completion activities commenced March 2010 • Drilling performance “best-in-cl
Slide 18: Jubilee Phase 1 – Significant progress within Ghana
Jubilee Phase 1 – Significant progress within Ghana REGULATORY • Installation & commissioning EIA approved – December 2009 • Emergency response, oil spill and security plans upgraded • Safety Case undergoing independent design verification INFRASTRUCTURE • New Tullow Ghana office currently being com
Slide 19: Ghana – beyond Jubilee Phase 1
Ghana – beyond Jubilee Phase 1 Jubilee Unit Area (500–700–1,000 mmbo) • Phase 1b - early infill potential identified - ~5 infill wells using existing infrastructure • Phase 1c - up to 20 additional wells - further subsea infrastructure - upgrade of FPSO capacity Southeast of Jubilee (100–500–800 mmb
Slide 20: The next phase for Lake Albert now under way
The next phase for Lake Albert now under way Requirement for new partnership identified early • Focus on a basin exploration strategy has delivered world-class results • Transparent farmdown process pursued with GoU support (Oct 09) • Heritage sale delivered opportunity to align new basin partners (
Slide 21: Uganda – Block 2 Development (Phase 1)
Uganda – Block 2 Development (Phase 1) Extended Well Tests • First oil production in Uganda in 2010 • Delivery of key dynamic reservoir and process data • EWT data will guide Kasamene and future developments Kasamene • Crude to be sold to local industry Nzizi Gas Field development (IPP) • 50 MW Powe
Slide 22: Delivering the next phase of production growth
Delivering the next phase of production growth Existing Production • Ensure 2010 production of 55-57,000 boepd • Maintain existing asset performance through incremental investment New Developments • Jubilee first oil in Q4 2010 • Define and sanction Jubilee Phase 1b & 1c and Tweneboa • Commence earl
Slide 23: Exploration & Appraisal – Angus McCoss
Exploration & Appraisal – Angus McCoss 2009 Full year results Slide 23
Slide 24: 87% global exploration success rate in 2009
87% global exploration success rate in 2009 Senegal Mauritania Netherlands Seismic Drilling 620 sqkm 1,064 sqkm 3D PSDM 1,140 sqkm 3D PSTM Acquisition Offshore 3D PSDM 1,880 sqkm 3D PSDM 1,064 sqkm Processing 3D PSDM Onshore Guyana 1,260 sqkm FTG / Grav / Mag 3D PSDM 93 sqkm of 3D Sierra Leone 1,889
Slide 25: Consistent exploration strategy: key to sustained success
Consistent exploration strategy: key to sustained success Bold exploration-led value growth programmes • $500+ million annually in exploration & appraisal campaigns • Additional $200+ million annually in portfolio rejuvenation through new ventures Teamwork • 300 years experience in global leadership
Slide 26: Ghana: Exploration & appraisal continues to deliver
Ghana: Exploration & appraisal continues to deliver Fields discovered since 2007 • Jubilee, Odum & Tweneboa 2009 Appraisal – 100% Success • Mahogany-4, Mahogany Deep-2, Odum-2 • Confirms extension of Upper Cretaceous oil plays 2010 Activity • Tweneboa-2 finds major oil & gas-condensate field • Dahom
Slide 27: Ghana: Deepwater Tano high-equity accelerated E&A
Ghana: Deepwater Tano high-equity accelerated E&A High impact & high value 2010 campaign • Following up on successful plays • Drilling out high potential exploration prospects • Appraising discoveries Tweneboa/Owo/Ntomme (100 – 400 - 1,400 mmboe) • Potentially 60% liquids (70% may be oil) • Owo-1 im
Slide 28: Ghana: Realising more value in West Cape Three Points
Ghana: Realising more value in West Cape Three Points Stepwise 2010 -2011 campaign • Extending plays east of Jubilee • 3D seismic processing to enhance imaging Dahoma-1 (Southwest Channel) • Satellite prospect in the southeast Jubilee area • Result expected early April South Central Channel • Next e
Slide 29: Equatorial Atlantic West Africa: extending the Jubilee play
Equatorial Atlantic West Africa: extending the Jubilee play First mover advantage – 1H 2009 farm-ins • Two licences in Sierra Leone & three in Liberia Venus discovery opens Liberian Basin • Well proves working petroleum system • Jubilee play extended 1,100 km from Ghana 3D seismic images many leads
Slide 30: Equatorial Atlantic South America: Jubilee analogues
Equatorial Atlantic South America: Jubilee analogues Venus de-risks Guyana Basin • Jubilee play probably extends across Atlantic • Farmed out 33% (+12%) to Shell & 25% to Total • Tullow carried for extensive 3D seismic & first wildcat 3D seismic targets Jubilee-type fans • Acquisition completed Marc
Slide 31: Uganda: next steps in basinwide exploration & appraisal
Uganda: next steps in basinwide exploration & appraisal World-class basin discovered • Over 800 mmbo discovered; over 1.5 Bbo yet to find • 27 out of 28 wells successful (7 drilled in 2009) • New partnership for accelerated basinwide E&A Nearshore oil has material potential • High-flow rate Kingfish
Slide 32: 2010 Exploration and Appraisal programme
2010 Exploration and Appraisal programme Country Block Prospect Interest Gross upside* Spud Date southeast Jubilee/satellites 2 Well Campaign 22.9% 800 mmbo Drilling-Q3 2010 Exploration & Appraisal Ghana Tweneboa/Owo/Ntomme 3 Well Campaign 49.95% (op) 1,400 mmboe Q1 2010 Exploration & Appraisal Twen
Slide 33: Conclusions – Aidan Heavey
Conclusions – Aidan Heavey 2009 Full year results Slide 33
Slide 34: A company transformed
A company transformed • World class developments in Ghana and Uganda - Jubilee Phase 1 on track; first oil Q 4 2010 - Uganda farmdown and accelerated development • Focus remains on material exploration and resources upside • Strengthened balance sheet; debt and equity placings • High quality team •
Slide 35: Tullow Oil plc
Tullow Oil plc 3rd Floor, Building 11 Chiswick Park, 566 Chiswick High Road London, W 4 5 YS Tel: +44 20 8996 1000 Fax+44 20 8994 5332 Investor Relations Contact Chris Perry: chris.perry@tullowoil.com 2009 Full year results Slide 35