Slide 1: 2012 Full Year Results
2012 FULL YEAR RESULTS Tullow Oil plc 13 February 2013
Slide 2: Disclaimer
2012 FULL YEAR 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 reasonable
Slide 3: Contents
2012 FULL YEAR RESULTS Contents Section Page Introduction 4 Finance 7 Development and Operations 16 Exploration and Appraisal 25 Conclusion 37 Appendix 39 Slide 3
Slide 4: Introduction – Aidan Heavey
2012 FULL YEAR RESULTS Tullow Oil plc – 2012 Full Year Results Introduction – Aidan Heavey
Slide 5: Significant progress in 2012
2012 FULL YEAR RESULTS Significant progress in 2012 Substantially strengthened and de-risked the business through: • Exploration success in Kenya • Five new country entries (4 x Atlantic Margin, 1 x East Africa) • Successful and cost-effective remediation of Jubilee • Development plans presented in
Slide 6: Tullow's exploration-led value growth strategy
2012 FULL YEAR RESULTS Tullow’s exploration-led value growth strategy Additional cash flow from new production ~$4bn debt facilities Exploration and High Margin Monetisation Production Appraisal Options & Selective Cash flow $1bn + p.a. Portfolio Development Management Fully Funded Costs & Dividends
Slide 7: Finance – Ian Springett
2012 FULL YEAR RESULTS Tullow Oil plc – 2012 Full Year Results Finance – Ian Springett
Slide 8: 2012 full year results summary
2012 FULL YEAR RESULTS 2012 full year results summary 2012 2011 Change Sales revenue $2,344m $2,304m +2% Operating profit $1,185m $1,132m +5% Profit after tax $666m $689m -3% Basic earnings per share 68.8c 72.5c -5% Full year dividend per share 12.0p 12.0p 0% Capital investment1 $1,870m $1,432m +31%
Slide 9: Net income 2012 v 2011
2012 FULL YEAR RESULTS Net income 2012 v 2011 $m 1,500 1,250 179 1,000 701 371* 38 66 750 58 7 47 63 47 18* 500 689 666 250 0 Net Income Price Volume Cash Other costs Gain on Exploration Net Finance Tax IAS 39 Net Income 2011 operating (*non-cash) disposal Write-offs 2012 costs (*write downs) $701 m
Slide 10: Sources and uses of funds
2012 FULL YEAR RESULTS Sources and uses of funds $m 2012 Net cash inflow $44m Cash inflow $4,380m Sources Uses 4,500 $25m • Operating cash flow $1,785m* (2011:$1,903m*) $380m • Disposals $2,570m (2011:$0m) 4,000 $264m • Share proceeds $25m (2011:$87m) 3,500 Cash outflow $4,336m 3,000 $2,570m $1,849m
Slide 11: 2013 capital expenditure
2012 FULL YEAR RESULTS 2013 capital expenditure $2,000m for full year 2013 2013 $800m $270m $580m $350 • Ghana: Jubilee phase 1A & TEN development $2,000m • Uganda: Continuing appraisal and development • Other Africa: Maintaining mature production & high-impact exploration 2012 $756m $378m $776m • R
Slide 12: Increased scale
2012 FULL YEAR RESULTS Increased scale 2009 2012 Change Sales revenue $916m $2,344m +156% Net profit $31m $666m +2050% Cash generated from operations1 $588m $1,778m +202% Capital investment $1,189m $1,870m +57% Net Debt2 $1,144m $989m -14% Loan facilities $2,250m $4,000m +78% 1 Before working capita
Slide 13: Step change in cash flow over last three years
2012 FULL YEAR RESULTS Step change in cash flow over last three years 2009 Cash Inflow OCF* Tax & E&A D&O Cash Outflow Finance capex capex Cash Inflow OCF* Asset disposals Cash Outflow Tax & D&O Finance E&A capex capex 2012 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 $ million * After work
Slide 14: Tullow's exploration-led value growth strategy
2012 FULL YEAR RESULTS Tullow’s exploration-led value growth strategy Additional cash flow from new production ~$4bn debt facilities Exploration and High Margin Monetisation Production Appraisal Options & Selective Cash flow $1bn + p.a. Portfolio Development Management Fully Funded Costs & Dividends
Slide 15: Strong balance sheet; financed to deliver next stage of growth
2012 FULL YEAR RESULTS Strong balance sheet; Financed to deliver next stage of growth • Strong results and successful financing strategy have transformed the balance sheet • Clear funding strategy for next phase of growth - Exploration Funded by Production cash flow - Development spend constrained w
Slide 16: Development and Operations – Paul McDade
2012 FULL YEAR RESULTS Tullow Oil plc – 2012 Full Year Results Development and Operations – Paul McDade
Slide 17: Converting Resources - portfolio management and development
2012 FULL YEAR RESULTS Converting Resources - portfolio management and development Group Reserves and Resources Reserves and Resources 1,203 mmboe 2,000 • Commercial Reserves - 388 mmboe 1,800 1,600 - TEN transferred to Reserves - 112 mmbo 1,400 • Contingent Resources - 815 mmboe 1,200 mmboe 1,000 -
Slide 18: High quality African focused oil production
2012 FULL YEAR RESULTS High quality African focused oil production Group Working Interest Production Ghana – Jubilee operated Current production production Future production 100 Other licence areas Europe 40 90 Asia 35 80 Ghana 30 70 Rest of Africa kboepd 25 kboepd 60 20 50 15 40 10 30 5 20 0 10 201
Slide 19: West Africa – high quality portfolio being sustained
2012 FULL YEAR RESULTS West Africa – high quality portfolio being sustained 2012 D&O capex spend Current producing fields Rest of the World • Gabon $107m - Significant ongoing development activity involving ~60 wells p.a. Ghana - Net production increased to over 14,000 bopd Rest of $776m $388m West
Slide 20: Jubilee field – production stable; Phase 1A on track
2012 FULL YEAR RESULTS Jubilee field – production stable; Phase 1A on track Jubilee field well potential Jubilee production stable 160 • Well recovery plan delivered below capex guidance Well Potential 140 Excess Capacity • Well rates recovered to pre-acid levels and sustained FPSO oil capacity • Fu
Slide 21: Jubilee area – future potential being confirmed
2012 FULL YEAR RESULTS Jubilee area – future potential being confirmed Jubilee full field development plan • Supports P50 Reserves of 700 mmboe, with upside • ~ 20 infill well locations already identified • 4D seismic planned to enhance recovery • Currently discussing plan with Government • Attracti
Slide 22: TEN development – progressing to sanction
2012 FULL YEAR RESULTS TEN development – progressing to sanction PoD submitted November 2012 mmboe P90 P50 P10 • Discussions with GoG progressing towards approval TEN Reserves & Resources * 200 360 600 • Negotiations on gas ongoing Oil/Gas Ratio (%) 80:20 70:30 60:40 • FPSO and Subsea award decision
Slide 23: Uganda development - negotiations ongoing
2012 FULL YEAR RESULTS Uganda development - negotiations ongoing Uganda Resources Successful Uganda appraisal being completed Risked Prospective Resource • Successful appraisal results increase contingent resources 0.2bn bls • Limited remaining appraisal activity and spend Discovered Enhanced 1.8bn
Slide 24: Delivering focused portfolio of high quality oil
2012 FULL YEAR RESULTS Delivering focused portfolio of high quality oil • Significant progress in commercialisation of contingent resources • Development investment managed within funding capacity • Focus on core assets, with monetisation reviews at key value points • Significant extensions to life
Slide 25: Exploration & Appraisal – Angus McCoss
2012 FULL YEAR RESULTS Tullow Oil plc – 2012 Full Year Results Exploration & Appraisal – Angus McCoss
Slide 26: Oil exploration strategy focused on Africa & Atlantic Margins
2012 FULL YEAR RESULTS Oil exploration strategy focused on Africa & Atlantic Margins Norwegian North Atlantic Continental Shelf Exploration Studies & Business Development Central Atlantic Central Atlantic Major Exploration Margin East African Campaign Launched Rift Basins Guyanas East African Transf
Slide 27: Sustained industry-leading exploration & appraisal performance
2012 FULL YEAR RESULTS Sustained industry-leading exploration & appraisal performance 100 93% Appraisal Success 90 80 77% E&A Success % 70 60 58% Exploration Success 50 2012 46 E&A Wells 40 34 E&A Successes Number of Wells 32 Appraisal Wells 30 26 Appraisal Successes 20 14 Exploration Wells 10 8 Exp
Slide 28: Industry-leading exploration acreage position
2012 FULL YEAR RESULTS Industry-leading exploration acreage position Exploration wells Appraisal wells Key trigger wells South American Atlantic Margins 2 0 Priodontes-1, Cebus-1 Central Atlantic Margins 3 0 Frégate-1, Tapendar-1 West African Atlantic Margins 5 1 Calao-1, Sylli-1 East African Rift B
Slide 29: Campaign approach to exploration: East Africa example
2012 FULL YEAR RESULTS Campaign approach to exploration: East Africa example UGANDA 21 PROSPECTS DRILLED Follow-on Prospect 1.2 Follow-on Prospect 1.2bn Kasamene-1 Jobi-East Follow-on Prospect 1.0 10,000 sq km* Nsoga-Kigogole Billion Barrels Follow-on Prospect 0.8 Mputa-1 Follow-on Prospect Jobi-Rii
Slide 30: Exploring over 10 related basins in Kenya & Ethiopia
2012 FULL YEAR RESULTS Exploring over 10 related basins in Kenya & Ethiopia Three scales of exploration ongoing simultaneously in multiple basins 1. Appraisal & testing of Ngamia-1 & Twiga South-1 (25 sq km scale) 2. South Lokichar Basin drill-out towards commerciality (10,000 sq km) 3. High-grading
Slide 31: Kenya: South Lokichar Rift Basin drill-out towards commerciality
2012 FULL YEAR RESULTS Kenya: South Lokichar Rift Basin drill-out towards commerciality Etom Agete North Basin Bounding Fault Play: Agete South Twiga-1 “String of pearls” Ekales like Kingfisher in Amosing Lake Albert Ekosowan Ngamia-1 Ewoi Etunyuk Basin Flank Play: Q2 2013 Etuko-C “Prospect Cascades
Slide 32: Mozambique offers exciting opportunities with play diversity
2012 FULL YEAR RESULTS Mozambique offers exciting opportunities with play diversity • Oil seeps to west & oil shows to north in recent Ironclad-1 • Rifted transform margin with broad play diversity - Large structural highs - Carbonate potential - Stratigraphic traps • “Ibo High” 3D seismic survey: m
Slide 33: Mauritania core campaign drilling this year
2012 FULL YEAR RESULTS Mauritania core campaign drilling this year Significant play diversity in Mauritania acreage • 80 prospects with risk spread through multiple Central Atlantic plays • Light oil & gas-condensate already proven in the basin • Testing new & deeper plays for bigger & better rese
Slide 34: West Africa Transform Margin campaign extended to Guinea
2012 FULL YEAR RESULTS West Africa Transform Margin campaign extended to Guinea Guinea • Acquired significant operated acreage position; 1.5 times existing WATM acreage • Play diversity offsets exploration risks; large structural - stratigraphic traps & carbonate leads • Sylli-1 to drill ‘Jubilee-ty
Slide 35: Guyanas: extensive "Jubilee play" potential plus upside plays
2012 FULL YEAR RESULTS Guyanas: extensive “Jubilee play” potential plus upside plays • Jubilee play campaign continues across the Atlantic; Multiple Ghana-scaled prospective fan systems • New 3D seismic surveys reveal exciting drilling targets in Suriname and French Guiana 35
Slide 36: North Atlantic margins campaign in Greenland & Norway
2012 FULL YEAR RESULTS North Atlantic margins campaign in Greenland & Norway Greenland - highly prospective acreage • 1,800 sq km 3D seismic acquired • Evaluation of licence to continue to 2015 Norway - relatively unexplored vs UK • Highly prospective oil basins • Experienced exploration team • Very
Slide 37: Conclusion – Aidan Heavey
2012 FULL YEAR RESULTS Tullow Oil plc – 2012 Full Year Results Conclusion – Aidan Heavey
Slide 38: Positioned to add significant value in 2013
2012 FULL YEAR RESULTS Positioned to add significant value in 2013 • Strong financial position • Focus on big oil and basin-opening exploration • Cashflow generated from high quality production and asset sales • Development capex within our debt facilities and portfolio management • Industry-leading
Slide 39: Appendix
2012 FULL YEAR RESULTS Tullow Oil plc – 2012 Full Year Results Appendix
Slide 40: 74% global E&A success ratio in 2012
2012 FULL YEAR RESULTS 74% global E&A success ratio in 2012 GREENLAND UK - 1 well NETHERLANDS - 1 well GABON - 6 wells Seismic Key 1,814 sq km 3D PSDM Ketch-10 K8-FA-308 Limande-8 OMOC-N-703 Acquisition Tchatambe-B9 OMOC-N-203 OMOC-N-702 OMOC-N-206 Airborne Surveys CONGO (BRAZZAVILLE
Slide 41: 12 month Exploration and Appraisal programme (Feb 2013)
2012 FULL YEAR RESULTS 12 month Exploration and Appraisal programme (Feb 2013) mmboe Country Block Prospect Interest Gross Mean Net Mean Spud Date WEST & NORTH AFRICA Côte d’Ivoire CI-103 Calao 45% (op) 150 68 Q2 2013 This continuation of the early stage Côte d’Ivoire campaign is directly following
Slide 42: 12 month Exploration and Appraisal programme
2012 FULL YEAR RESULTS 12 month Exploration and Appraisal programme mmboe Country Block Prospect Interest Gross Mean Net Mean Spud Date SOUTH & EAST AFRICA Sabisa 61 26 In progress Ethiopia South Omo Shimela 50% (op) 88 37 Q3 2013 Contingent well 65 28 Q4 2013 Twiga Appraisal 15 6 Q4 2013 13T 50% (o
Slide 43: 12 month Exploration and Appraisal programme (Feb 2013)
2012 FULL YEAR RESULTS 12 month Exploration and Appraisal programme (Feb 2013) mmboe Country Block Prospect Interest Gross Mean Net Mean Spud Date EUROPE, SOUTH AMERICA & ASIA The Netherlands E11 Vincent 60% (op) 17 5 2H 2013 PL 537 Wisting Central 20% 132 26 Q2 2013 PL 537 Wisting North 20% 125 25
Slide 44: Value creation & monetisation planning from E to P
2012 FULL YEAR RESULTS Value creation & monetisation planning from E to P A B Execute the exploration Value Value Take the asset all the way from and appraisal with full equity. exploration through appraisal, Farm-down prior to development, development and production with to receive capex carry thro
Slide 45: Tullow Oil plc
2012 FULL YEAR RESULTS Download the Tullow Investor Relations and Media App from the Apple and Android stores: 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