Tullow Oil Plc · LSE:TLW
Tullow Oil — FY2023 Earnings Presentation
24 slides from Tullow Oil's earnings presentation, Mar 6, 2024
Slide 1: 2023 Full Year Results
2023 Full Year Results 6 March 2024
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: Overview
Overview 2023 Full Year Results
Slide 4: Building a unique African platform
Building a unique African platform Our purpose is to build a better future through responsible oil and gas development Opportunity >30 bn bbls1 West and East Africa proven resources offer rich future material scale and mature opportunities A partner for 8% of global oil supply Africa’s potential to
Slide 5: Delivering our strategy and plan in 2023
Delivering our strategy and plan in 2023 On track to deliver our target of c.$800 million free cash flow over the 2023-25 period Operational Capital Business excellence efficiency growth • Jubilee South East project • Materially improved balance • >30% increase in Jubilee delivery sheet with >$250m
Slide 6: Financial
Financial 2023 Full Year Results
Slide 7: Demonstrating delivery through key financial metrics
Demonstrating delivery through key financial metrics Growing production, delivering free cash flow and reducing debt 2022 Actual 2023 Actual 2024 Guidance Production 61.1 kboepd 62.7 kboepd 62-68 kboepd Oil price $ 88.0 /bbl $ 77.5 /bbl $ 80 /bbl realised realised forecast Capital expenditure $ 354
Slide 8: Driving capital efficiency through a disciplined approach
Driving capital efficiency through a disciplined approach Reductions in operating costs Reset G&A cost base >$300m 15 > % net reduction c.$250m >$100m Non-op > 50 % net reduction Operating costs1 ($m) TEN c.$50m Net G&A ($m) Jubilee 2 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024 Disci
Slide 9: Protecting revenues and retaining upside through hedging
Protecting revenues and retaining upside through hedging Significantly increased upside exposure once legacy Hedging policy designed to protect against extreme oil hedges roll off in May 2024 price downside whilst retaining access to upside 1H24 2H24 Puts, 20% (at least) 60% upside Average cap $ 77
Slide 10: Taking actions to materially improve balance sheet
Taking actions to materially improve balance sheet Demonstrated access to long-term capital Bond prices reflect confidence in strategy • $400m secured notes facility agreed with Glencore • 2025 Notes fully de-risked 100 • Opportunistic bond buy-backs accelerate debt reduction +75% • Gross debt reduc
Slide 11: On track to become a low debt business by 2025
On track to become a low debt business by 2025 Net debt reduction of over $700 million 4 Glencore facility addresses 2025 maturity Gross debt Buy-backs of >$400 million of bonds at YE 3 Further $600m FCF 2024-25 Cash balances Well positioned for successful refinancing of 2026 debt maturity 2 1 Geari
Slide 12: Looking ahead to a sustainable high-cash yielding business
Looking ahead to a sustainable high-cash yielding business 3 2023-25 Prioritise deleveraging 2026+ Investment optionality to grow while investing to grow whilst retaining <1x leverage c.$800 Sustainable free cash flow generation 2 million Contingent proceeds from Uganda Sources and uses of cash at $
Slide 13: Operations
Operations 2023 Full Year Results
Slide 14: Maintaining operational excellence across our assets
Maintaining operational excellence across our assets Delivering complex projects FPSO facility upgrades $1bn Jubilee South East Projects to sustain production, minimise project on stream in July 2023 decline and reduce flaring Complex offshore project delivered on budget; >250 mbw/d water injection
Slide 15: Earning our reputation as a trusted partner for African energy
Earning our reputation as a trusted partner for African energy Safe Shared Environmental Equality and operations prosperity stewardship transparency 0.20 $221m Progress $713m total recordable injury frequency local supplier spend to eliminate routine flaring and total socio-economic contribution mee
Slide 16: Maturing a rich reserves and resources profile
Maturing a rich reserves and resources profile Jubilee Further infill and licence Jubilee extension potential Gas Gas TEN TEN Significant gas resource Long-term GSA Gas and oil infill opportunity Gabon Gabon Low risk ILX opportunities CdI Côte d’Ivoire Maturing prospect inventory Kenya Optionality t
Slide 17: Achieving production growth at Jubilee
Achieving production growth at Jubilee JSE delivered Gross Jubilee production 2023-24 (kbopd) 30% gross Jubilee production growth 1H23 to 2H23 110 Targeting 90-110 kbopd 90 range to 2030 144 mmboe 2P reserve base with multiple infill opportunities identified 105 mmboe 2C resource potential to bring
Slide 18: Optimising production and investment in TEN
Optimising production and investment in TEN Current highlights Longer-term potential Production stabilised Significant gas commercialisation opportunity by pressure response from gas and water injection, and improved asset subject to approval integrity, liquid recovery Material contingent resource o
Slide 19: Maintaining a self-funding, cash generative Gabon portfolio
Maintaining a self-funding, cash generative Gabon portfolio Gabon portfolio delivery and outlook Optimised portfolio Tchatamba facilities a core hub for Tullow • Stable production outlook • Flexible annual capex range $30-70 million • Average annual cash flow of c.$90 million 2020-281 Long-life asse
Slide 20: Outlook
Outlook 2023 Full Year Results
Slide 21: A compelling value proposition
A compelling value proposition Cash-generative Significant equity Sustainable FCF business with Solid financial Material step value accretion gives optionality a diverse and operational up in free cash on core business for investment portfolio of performance flow as debt is repaid and returns assets
Slide 22: Appendix
Appendix 2023 Full Year Results
Slide 23: Financial performance, key metrics and guidance
Financial performance, key metrics and guidance 2024 Guidance Financial performance 2023 2022 Production (kboepd) Realised price after hedging ($/bbl) 62.7 77.5 61.1 88.0 62-68 Production kboepd Revenue ($m) 1,634 1,783 Gross profit ($m) Administrative expenses ($m) 765 56 1,086 51 C.$250million Cap
Slide 24: Tullow Oil plc
Tullow Oil plc 9 Chiswick Park, 566 Chiswick High Road London W4 5XT United Kingdom Tel: +44 (0)20 3249 9000 Email: ir@tullowoil.com Web: www.tullowoil.com