Tullow Oil Plc · LSE:TLW
Tullow Oil — FY2020 Earnings Presentation
32 slides from Tullow Oil's earnings presentation, Mar 10, 2021
Slide 1: Tullow Oil plc | 2020 Full Year Results
Tullow Oil plc Tullow Oil plc | 2020 Full Year Results 10 March 2021
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: Agenda and Presenters
2020 Full Year Results Agenda Presenters Rahul Dhir Chief Executive Officer Overview Financial Les Wood Chief Financial Officer Operations Conclusion Tullow Oil plc | 2020 Full Year Results Slide 3
Slide 4: Overview
OVERVIEW Tullow Oil plc | 2020 Full Year Results
Slide 5: 2020 Full Year Results overview
2020 Full Year Results overview Operations • Production in line with guidance at 74,900 bopd • Ghana – improved operational performance underpinned by gas offtake and water injection • Non-op – diversified portfolio delivering stable and sustainable production • Kenya – licence extended and developm
Slide 6: Unlocking value
Entering delivery mode and executing the plan Production base with material resource play Significant positions in discovered and emerging basins 2021-30 Operational turnaround >95% uptime target $7 to $8.5bn c. underlying operating <$11 opex/bbl target cash flow1 171 Net 2C Kenya Unlocking value mm
Slide 7: Key priorities for 2021
Key priorities for 2021 Operational turnaround → Deliver low-cost production within guidance range 60,000-66,000 bopd → Initiate drilling campaign in Ghana and deliver production growth from 2022 onwards Cost and capital discipline → Pursue continuous improvement to reduce costs → Drive drilling cos
Slide 8: Carbon reduction initiatives
Targeting Net Zero by 2030 (Scope 1 & 2) Pathway to carbon neutrality in 2030 2020 emissions baseline Jubilee gas Interim target of 40-45% de-bottlenecking reduced emissions1 by 2025 to eliminate routine flaring TEN process Carbon reduction initiatives modifications NPV+ to eliminate projects Nature
Slide 9: Financial
FINANCIAL Tullow Oil plc | 2020 Full Year Results
Slide 10: Financial highlights
Financial highlights Self-help delivering c.$1bn over two years • Uganda, Equatorial Guinea and Dussafu sales to raise over $0.7bn with further upside potential • Annual cost savings of >$125m from headcount reduction, outsourcing and efficiencies Cash flow generation supports deleveraging and value
Slide 11: 2020 Full Year Results
2020 Full Year Results 1,398 1,683 12.1 1,396 11.1 804 -1,222 -1,694 20191 2020 2019 2020 YE 2019 YE 2020 2019 20203 Revenue ($m) Opex ($/boe)2 Adjusted EBITDAX ($m) Loss after tax ($m) 2.8 490 432 2.4 3.0 355 288 2.0 2019 2020 2019 2020 YE 2019 YE 2020 YE 2019 YE 2020 Capital investment ($m) Free c
Slide 12: Addressing near term debt maturities
Addressing near term debt maturities Self-help... RBL redeterminations... Refinancing... In progress → Annual cash savings → March and September → Constructive discussions >$125 million 2020 redeterminations with representatives of → Uganda sale - $575 million completed in challenging banks and bond
Slide 13: Conservative assumptions in a volatile environment
Conservative assumptions in a volatile environment Tullow CMD assumptions based on $45/bbl in 2021, $55/bbl flat nominal in 2022+ 80 2020 60 Dramatic crash and rebound following OPEC+ deal, vaccines Oil price ($/bbl) 40 Hedging remains a key risk management tool 20 External range (sources below) Dat
Slide 14: Allocating capital towards producing assets
Allocating capital towards producing assets Maintaining a flexible capex range ($m) Impairments and write-offs ($m) 500 1,400 2019 1,200 2020 400 Book value (31 December 2020) 1,000 288 300 265 Flexible range 800 Exploration 81 150-450 60 600 200 Kenya 26 5 Non-op 60 400 58 100 Ghana 200 123 140 0 0
Slide 15: Jubilee and TEN: Structurally advantaged assets
Jubilee and TEN: Structurally advantaged assets 2021-30 opex ($/boe) Attractive portfolio of African production investments 200% Low cost assets with flexibility in investment profiles 150% Historic (net) capex $5.7bn $65/bbl 2021-30 (net) capex $2.1bn Potential for rationalisation 100% Combined IRR
Slide 16: 2021 Guidance
2021 Guidance Key guidance figures Group production breakdown 63 $100million 23 60-66kbopd $265million Oil production (kbopd) Production Capex Decommissioning 16 $0.5billion $ 0.2billion 24 c.$12/boe Underlying Pre-financing Opex operating cash flow cash flow1 At $50/bbl & 63kbopd At $50/bbl & 63kbo
Slide 17: Operations
OPERATIONS Tullow Oil plc | 2020 Full Year Results
Slide 18: Commitment to health and safety
Commitment to health and safety COVID-19 Safety • Close co-operation with Government of Ghana Lost time injury rate (LTIR) Total recordable injury rate (TRIR) IOGP LTIR IOGP TRIR 1.27 • Successful management of outbreak offshore 0.98 Ghana (mid 2020) 0.73 → Both FPSO operations impacted 0.37 0.57 0.
Slide 19: Robust audited reserves and resources base
Robust audited reserves and resources base > 160% Guyana, 2020 reserves replacement1 47 Jubilee, 111 Non-Op, 49 47 115 50 • 2P reserves increase largely due to: YE19 Kenya, YE19 216 → Improved Jubilee performance 243 121 171 496 1,102 → Maturation and acceleration of Jubilee mmboe Jubilee, mmboe pro
Slide 20: Jubilee – Production driven by investment and operational performance
Jubilee – Production driven by investment and operational performance 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2016 2018 2019 120,000 Turret failure Turret repair and High water cut 35 stabilisation and GOR 30 Facilities improvements: 100,000 Total wells onstream at YE Gross production
Slide 21: TEN – Material additional capacity potential
TEN – Material additional capacity potential 2016 2017 2018 2019 2020 Uptime improvement: 2017 80,000 Border dispute 16 2019 → 2020 → 2021f resolved 70,000 14 Uptime 94 → 99 → 99% Gross production (bopd) Total wells onstream at YE 60,000 12 50,000 10 40,000 8 90mmbbls of defined projects: • Ntomme F
Slide 22: Well-defined, low-risk opportunities
Well-defined, low-risk opportunities 2021 B A TEN 2021 2021 F E D JUBILEE C Tullow Oil plc | 2020 Full Year Results Slide 22
Slide 23: Delivering visible production growth
Delivering visible production growth Schedule representing onstream dates Producer Water injector Gas injector Drill options 2021 drilling program Illustrative 20221 Jubilee TEN Indicative first year incremental production impact Jubilee producers Jubilee water injector TEN gas injector c.8,000 bopd
Slide 24: Stable non-operated production performance and monetisation
Stable non-operated production performance and monetisation Reliable, cash-generative portfolio Côte d’Ivoire Equatorial Guinea Performance Gabon Stable production c.22-25 kboepd 25 Monetisation1 22 Sale of c.6 kboepd of 2021 production for $180 million Production1 (kboepd) Maturing low-risk investm
Slide 25: Kenya development redesign nearing completion
Kenya development redesign nearing completion Sustainable economic development at low oil price Material high • Shallow, productive reservoirs 1.5 billion bbls quality onshore • Light waxy crude resource base STOIIP (gross) • Large onshore acreage position • 2021 WP&B approved; licences extended unt
Slide 26: Generating value through prospect identification and maturation
Generating value through prospect identification and maturation Guyana: high grading drill candidates for 2022+ Suriname: GVN-1 drilling Upper Cretaceous turbidite play Dual targets of >400mmboe (gross) Pmean recoverable Testing extension of working hydrocarbon system Three proven plays on Tullow ac
Slide 27: Unlocking value in our exploration portfolio
Unlocking value in our exploration portfolio Côte d’Ivoire: Maturing prospects Argentina seismic Upper Cretaceous and Tertiary turbidite plays c.5,000 sq.km of 3D seismic newly acquired Underexplored block adjacent to TEN fields and infrastructure c.5,000 sq.km of 3D seismic Westward extension of pr
Slide 28: Conclusion
CONCLUSION Tullow Oil plc | 2020 Full Year Results
Slide 29: Executing our robust cash generative business plan
Executing our robust cash generative business plan Lost cost asset base leveraged to oil price upside Operational turnaround c. $7 to $8.5bn underlying operating cash flow1 Implementing plan to deliver production growth emerging basins Discovered and Cost focus $4 to $5.5 bn c. Self-help measures de
Slide 30: Key Data
KEY DATA Tullow Oil plc | 2020 Full Year Results
Slide 31: 2021 Key data
2021 Key data Oil production (kboepd) 2021 forecast Group Reserves and Resources (at 31 Dec 2020) Operating costs1 ($/boe) 2021 forecast Ghana 40.5 Ghana 8.0 Jubilee 24.3 Equatorial Guinea 20.0 2P 29% TEN 16.2 Gabon2 19.0 900 Equatorial Guinea 4.8 mmboe Côte d’Ivoire 21.0 Gabon 15.4 2C 71% Côte d’Iv
Slide 32: Tullow Oil plc
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 Email: ir@tullowoil.com Web: www.tullowoil.com Follow Tullow on: