Tullow Oil Plc · LSE:TLW
Tullow Oil — H1 2011 Earnings Presentation
37 slides from Tullow Oil's earnings presentation, Aug 24, 2011
Slide 1: Tullow Oil plc – 2011 half-yearly results
2011 half-yearly results 24 August 2011 Tullow Oil plc – 2011 half-yearly results
Slide 2: Disclaimer
2011 half-yearly results 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 reasonabl
Slide 3: Contents
2011 half-yearly results Contents Section Page Introduction 4 Finance 6 Production and Development 14 Exploration and Appraisal 23 Conclusions 35 Slide 3
Slide 4: Introduction – Aidan Heavey
2011 half-yearly results Tullow Oil plc – 2011 half-yearly results Introduction – Aidan Heavey
Slide 5: Positioned to deliver significant future growth
2011 half-yearly results Positioned to deliver significant future growth • Record cash generation transforms balance sheet in 2011 • Dividend doubled reflecting robust cash flow • Continuing to build sector-leading exploration positions • Key frontier exploration well results imminent • Progressing
Slide 6: Finance – Ian Springett
2011 half-yearly results Tullow Oil plc – 2011 half-yearly results Finance – Ian Springett
Slide 7: Creating shareholder value
2011 half-yearly results Creating shareholder value • High-impact exploration portfolio Consistent and repeatable strategy • Ghana: Jubilee first production • Sustainable long term value growth & fast track development • Balance exploration, major projects & funding • Uganda: farm-down and future de
Slide 8: 2011 half-yearly results summary
2011 half-yearly results 2011 half-yearly results summary 1H 2011 1H 2010 Change Sales revenue $1,062m $486m + 119% Operating profit $588m $124m + 374% Net profit $330m $89m + 271% Basic earnings per share 35.0c 9.4c +272% Dividend per share 4.0p 2.0p +100% Capital investment1 $648m $651m No change
Slide 9: Net income 1H 2011 v 1H 2010
2011 half-yearly results Net income 1H 2011 v 1H 2010 $m A significant improvement in Net Income primarily due to higher prices and production volumes partially offset by consequent higher taxes. Slide 9
Slide 10: Revenue 1H 2011 vs 1H 2010
2011 half-yearly results Revenue 1H 2011 vs 1H 2010 1H 2011 - $1,062m 1H 2010 - $486m 2011 Revenues increased by 119% with new production from the Ghana Jubilee field and higher commodity prices Slide 10
Slide 11: Sources and uses of funds
2011 half-yearly results Sources and uses of funds $m 1H 2011 Net cash inflow $69m Cash inflow $1,515m Sources • Operating cash flow $777m* (1H 2010:$317m*) *) Uses $730m $112m • Net loan drawdown $730m (1H 2010:$403m) $175m Cash outflow $1,446m $404m • Cash Capex $755m (1H 2010:$624m) • Acquisition
Slide 12: 2011 capital expenditure
2011 half-yearly results 2011 capital expenditure • $1,500m forecast for 2011 Forecast $675m $825m $1,500m – Ghana: Jubilee phase 1a development & Enyenra/Tweneboa appraisal & development – Uganda: Exploration drill out and $715m $520m $1,235m Lake Albert development – High-impact exploration: Afric
Slide 13: The next phase of significant growth
2011 half-yearly results The next phase of significant growth Significant value growth proposition; Consistent and repeatable strategy transforming scale again • Sustainable long term value growth • High-impact exploration in material campaigns • Balance exploration, major projects & funding − West
Slide 14: Production & Development – Paul McDade
2011 half-yearly results Tullow Oil plc – 2011 half-yearly results Production & Development – Paul McDade
Slide 15: Strong production growth in 2011
2011 half-yearly results Strong production growth in 2011 Group working interest production Current production 100 Oil production U.K. Future production boepd (x000) 16 Other licence areas Gas production 80 12 8 Pakistan Bangladesh 4 boepd (x000) boepd (x000) 60 16 16 kboepd 0 2010 1H 12 12 2011 8 8
Slide 16: Jubilee ramp-up ongoing; further developments underway
2011 half-yearly results Jubilee ramp-up ongoing; further developments underway kbopd Jubilee Production Jubilee Phase 1 continuing to ramp-up 140 • Oil Production: 120 − 85k bopd increasing to 105k bopd in October 100 − 120k bopd in November after J07 sidetrack 80 Phase 1B • Injection: − ~220k bwpd
Slide 17: Enyenra & Tweneboa - on track for sanction in 1H 2012
2011 half-yearly results Enyenra & Tweneboa - on track for sanction in 1H 2012 Resources Appraisal and testing being progressed P90 P50 P10 • Appraisal drilling success at Tweneboa-4 Enyenra oil (mmbo) 100 200 550 • Successful DST’s completed Tweneboa hydrocarbons − Tweneboa-2: 6,500 bopd (incl Enye
Slide 18: Uganda - High levels of activity
2011 half-yearly results Uganda - High levels of activity Memorandum of Understanding (MOU) • Tullow signed a MOU with the Government of Uganda (GoU) on 15 March • The Sale and Purchase Agreements (SPAs) for the farm down were signed on 29 March • Agreements provided a clear process to resolve the o
Slide 19: Uganda - Preparing for the future
2011 half-yearly results Uganda - Preparing for the future High level of current activity Basin development planning Exploration and Appraisal drilling & testing Refinery to meet Uganda’s needs • Major development 3D seismic acquisition ongoing • Partnership supporting GoU to develop a refinery prop
Slide 20: Africa - sustaining mature production
2011 half-yearly results Africa - sustaining mature production Central and West Africa Mature Production Infill Programmes Identified and Underway Sustaining mature production through capital investment • Gabon: − Reserve replacement of ~200% in 1H 2011 − Participation in >50 wells mboepd − Similar
Slide 21: Europe and Asia
2011 half-yearly results Europe and Asia Nuon • Acquisition of Netherlands based Nuon E&P BV • Deal completed on 30th June 2011; cash consideration €300m • Production set to increase with new developments Q4’11 and 2012 • Focussing on Tullow’s exploration and development skills to influence current
Slide 22: Developments to deliver production growth
2011 half-yearly results Developments to deliver production growth • Jubilee plateau of 120,000 bopd by year-end • Investment planned to sustain mature assets • Development portfolio being progressed − Jubilee Phase 1A − Enyenra/Tweneboa − Uganda − Kudu − Banda • Existing portfolio can deliver in ex
Slide 23: Exploration and Appraisal – Angus McCoss
2011 half-yearly results Tullow Oil plc – 2011 half-yearly results Exploration and Appraisal – Angus McCoss
Slide 24: 71% global E&A ratio to date 1H 2011
2011 half-yearly results 71% global E&A ratio to date 1H 2011 UK – 2 wells NETHERLANDS – 1 well Seismic Key 9 Cameron (44/19b-7) 1,660 sqkm 8 Muscovite 8 Foxtrot (49/30b-10) 3D PSDM (E16-5) Acquisition ETHIOPIA Airborne Surveys 11,400 km MAURITANIA – 2 wells GABON – 2 wells Airborne survey Processin
Slide 25: Exploration campaigns gather momentum over next 12 months
2011 half-yearly results Exploration campaigns gather momentum over next 12 months Mauri-Tano Trend (a20 E&A wells) Jubilee Play Guyanas Trend (2 Wildcats) Jubilee Play East African Rift Basins (a10 Wildcats) Uganda follow on East African Simple strategy builds scale by Transform Margin pursuing suc
Slide 26: Equatorial Atlantic campaigns extending Jubilee play
2011 half-yearly results Equatorial Atlantic campaigns extending Jubilee play • Prospective turbidites imaged in high-quality 3D seismic across Tullow’s Equatorial Atlantic acreage • Jubilee play confirmed through successful E&A wells in Ghana & Sierra Leone (83% success ratio, 24/29) • High impact
Slide 27: Ghana E&A campaign continues to deliver results
2011 half-yearly results Ghana E&A campaign continues to deliver results Six fields discovered since 2007 • 85% success ratio in E&A campaign (22/26) West Cape Three Points • Licence drill out achieved • Eastern area relinquished, new licence being negotiated • Teak-1 makes important discovery in 5
Slide 28: Côte d’Ivoire - Jubilee follow-up prospects ready to drill
2011 half-yearly results Côte d’Ivoire - Jubilee follow-up prospects ready to drill Ready to extend Ghana success to western part of same basin • High quality 3D seismic covers acreage • Valuable tie to South Grand Lahou well • Large Late Cretaceous fans mapped • Multiple prospects matured for drill
Slide 29: Liberian basin campaign commences with Montserrado well
2011 half-yearly results Liberian basin campaign commences with Montserrado well Further extending the Jubilee play • Leveraging breakthrough discoveries at Venus-1 (2009) & Mercury-1 (2010) • 10,000 sq km of high quality 3D data reveals rich inventory of Late Cretaceous turbidite prospects Major wi
Slide 30: Three major fan systems being explored in Guyanas Trend
2011 half-yearly results Three major fan systems being explored in Guyanas Trend • Cingulata Fan System offshore French Guiana being tested by strategic Zaedyus wildcat (GM-ES-1) • Deep wildcat to target the Jaguar Fan System in Guyana – spudding October 2011 • 3D seismic planned for large Goliathbe
Slide 31: Uganda - Lake Albert Rift Basin E&A success continues
2011 half-yearly results Uganda - Lake Albert Rift Basin E&A success continues Major oil basin • >1.1 billion barrels discovered (P50) • 1.4 billion barrels yet to find (P50) High success continues through technical excellence • 96% E&A success ratio (43/45) • High quality 2D seismic & FTG unlock ba
Slide 32: Kenya & Ethiopia exploration campaign under way
2011 half-yearly results Kenya & Ethiopia exploration campaign under way LEGEND • FTG acquisition substantially completed revealing seven basins similar to the Lake Albert Rift Basin • Ngamia-1 wildcat to spud in Lokichar Basin in Block 10BB in Q4 2011 • Paipai-1 wildcat candidate for spudding in An
Slide 33: 12 month Exploration and Appraisal programme
2011 half-yearly results 12 month Exploration and Appraisal programme Country Block Drilling Candidates Interest Gross upside* Spud Date Deepwater Tano Tweneboa-4 DST 49.95% (op) 650 mmboe** In progress Deepwater Tano Enyenra-3A 49.95% (op) 550 mmbo** In progress Deepwater Tano Owo-1R 49.95% (op) 55
Slide 34: 12 month Exploration and Appraisal programme (cont.)
2011 half-yearly results 12 month Exploration and Appraisal programme (cont.) Country Block Drilling Candidates Interest Gross upside* Spud Date EA-1 Jobi-East-2 33.33% (op) 50 mmbo Q3 2011 EA-3A Kanywataba 33.33% (op) 220 mmbo Q4 2011 EA-1 Omuka-A 33.33% (op) 150 mmbo Q1 2012 Uganda EA-1 Raa-A 33.3
Slide 35: Conclusions – Aidan Heavey
2011 half-yearly results Tullow Oil plc – 2011 half-yearly results Conclusions – Aidan Heavey
Slide 36: Positioned to deliver significant future growth
2011 half-yearly results Positioned to deliver significant future growth • Record cash generation transforms balance sheet in 2011 • Dividend doubled reflecting robust cash flow • Continuing to build sector-leading exploration positions • Key frontier exploration well results imminent • $3.95bn debt
Slide 37: Tullow Oil plc contact details
2011 half-yearly results Tullow Oil plc 9 Chiswick Park 566 Chiswick High Road London, W4 5XT United Kingdom Follow Tullow on: Tel: +44 (0)20 3249 9000 Fax: +44 (0)20 3249 8801 Email: chris.perry@tullowoil.com