Tullow Oil Plc · LSE:TLW
Tullow Oil — H1 2009 Earnings Presentation
30 slides from Tullow Oil's earnings presentation, Aug 26, 2009
Slide 1: Tullow Oil plc – 2009 Half-yearly Results
T ll Tullow Oil plc l – 2009 Half-yearly H lf l RResults lt 26 August 2009
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. business Whilst Tullow believes the expectations reflected herein to be reasonable in light of th
Slide 3: Contents
Contents S ti Section P Page Introduction 4 Finance 6 Production & Development 12 Exploration & Appraisal 20 Conclusions 28 2009 Half-yearly Results Slide 3
Slide 4: Introduction – Aidan Heavey
Introduction – Aidan Heavey 2009 Half-yearly Results Slide 4
Slide 5: Delivering in a challenging economic climate
Delivering in a challenging economic climate • World class discoveries in Ghana and Uganda • Jubilee Phase 1 on track; Plan of Development approved • Developing commercial options for Uganda • Strengthened balance sheet • Generating material exploration and resources upside • High quality team; well
Slide 6: Finance – Ian Springett
Finance – Ian Springett 2009 Half-yearly Results Slide 6
Slide 7: 2009 Half-yearly results summary
2009 Half-yearly results summary • hfghfghfhfg 1H2009 1H2008 Change Sales revenue £291m £378m - 23% Operating profit £61m £201m - 70% Net profit £21m £126m - 83% Basic earnings per share 2.8p 17.2p - 84% Dividend per share 2.0p 2.0p 0% Capital investment £369m £187m + 97% Cash generated from operati
Slide 8: Operational performance
Operational performance Revenue Revenue Sales revenue £291m £m £378m £291m 400 • Production down 16% to 59,265 boepd* - Investment focus on Ghana and Uganda £96m • Realised oil price down 34% to $53.0/bbl (1H08:$80.1/bbl) • Realised gas price down 18% to 42.4p/th (1H08:51.7p/th) 300 £12m Gross profi
Slide 9: Sources and uses of funds
Sources and uses of funds Cash inflow £506m £m 1H’09 Net cash outflow £142m (1H’08: £49m outflow) 700 • Operating cash flow - £107m* (1H08:£295m*) Uses £105m - Decreased commodity prices, lower volumes 600 • Disposal proceeds - £7m (1H08:£35m) - Final Hewett-Bacton receipt £3m Sources £93m 500 £392m
Slide 10: Increased 2009 capital expenditure
Increased 2009 capital expenditure • £750m now forecast for 2009 Forecast 2009 £750m - E&A - Uganda and Sierra Leone - Ghana h development d l d drilling ll acceleration l 2008 £480m • 2009 capital split 65:35 between Production & Development and Exploration & Appraisal 2007 £370m • Focused on Ghana
Slide 11: Financial strategy
Financial strategy 2009 • Financial flexibility materially enhanced in 2009 - Secured $2bn financing - Successful equity placing - Gearing reduced to 25% as at 30 June 2009 Looking forwards • Overall objective to create sustainable long term growth underpinned by operational cash flow with a balance
Slide 12: Production & Development – Paul McDade
Production & Development – Paul McDade 2009 Half-yearly Results Slide 12
Slide 13: Strong operational delivery
Strong operational delivery • Jubilee Phase 1 remains on track for 2H 2010 first oil • Formal approval of the Jubilee Phase 1 Plan of Development received • Planning underway for the early commercialisation of Ugandan crude • Strong performance from producing assets • Full year production forecast o
Slide 14: Ghana - Jubilee Phase 1 and beyond…
Ghana - Jubilee Phase 1 and beyond… Jubilee Phase 1 – first oil 2H 2010 Jubilee Phase 1 • Government approval of development plan in place production ramp up 000' bopd • EIA on schedule for October 2009 approval 140 120 • Development drilling & facilities on schedule 100 • Capital costs remain withi
Slide 15: Jubilee Phase 1 – Project delivery on schedule
Jubilee Phase -1 – Project delivery on schedule DRILLING • Six new development wells & three top hole sections drilled • >20kbd flow rate on re-completed M-1 well • 33% of drilling & completion schedule complete • Focus is now moving to well completion activities • Attwood Hunter will be used to acc
Slide 16: Jubilee Phase 1 – Significant progress within Ghana
Jubilee Phase 1 – Significant progress within Ghana REGULATORY • Phase 1 Plan of Development approved • Jubilee Unit Agreement signed • EIA approval – submitted August 2009 for approval October INFRASTRUCTURE • Takoradi shorebase upgrade complete • Logistics setup in place to support two deepwater r
Slide 17: Lake Albert development plan: Taking the first steps
Lake Albert development plan: Taking the first steps Ugandan Resources Multi billion barrel basin potential Discovered Resources • Significant resources already discovered >2bn • Major on/offshore prospects to be drilled Prospective boe • Appraisal drilling strategy under review Resources Basin-wide
Slide 18: Uganda – Kasamene & Kingfisher developments
Uganda – Kasamene & Kingfisher developments Key development objectives • Achieve milestone of first oil production in Uganda • Phased approach to optimise subsequent phases • Minimise environmental footprint • Develop hub concept - enable efficient multi field development - facilitate future facilit
Slide 19: Group Production & Development performance
Group Production & Development performance 1H 2009 production First half production 59,265 boepd Asia 9% • Excellent performance from African & Asian assets - Ceiba and Okume exceeding expectation Europe - Espoir FPSO upgrade project ongoing 26% - M’Boundi water injection project on track for 200kbw
Slide 20: Exploration & Appraisal – Angus McCoss
Exploration & Appraisal – Angus McCoss 2009 Half-yearly Results Slide 20
Slide 21: 90% global exploration success rate in 2009 to date
90% global exploration success rate in 2009 to date Seismic Drilling Netherlands Acquisition Offshore 1,140 1 140 sqkm P Processing i Onshore 3D PSTM Full Tensor Gravity Mauritania 1,064 sqkm Guyana 3D PSDM Gabon Pakistan 93 sqkm of 3D 858 sqkm 1,889 sqkm survey 142 sqkm of Sierra Leone 3D PSTM 550
Slide 22: World-class opportunities offshore Ghana
World-class opportunities offshore Ghana New deepwater plays opened • Jubilee field discovery – June/August 2007 • Odum Od discovery di – February F b 2008 • Tweneboa discovery – March 2009 Jubilee field appraisal (600-1200-1800 mmbo) • Multiple M l i l appraisal i l wells ll confirm fi giant i di d
Slide 23: Key Exploration & Appraisal wells in Ghana
Key Exploration & Appraisal wells in Ghana Greater Jubilee appraisal area Tweneboa exploration & appraisal area 2009-2010 Exploration & Appraisal wells • Mahogany-4 M h 4 • Tweneboa-2 • Mahogany Deep-2 • Teak-1 • Mahogany-5 M h 5 • Owo-1 • Other E&A wells 2010 being scheduled based on rig availabili
Slide 24: West African Equatorial Atlantic follow up of Jubilee play
West African Equatorial Atlantic follow up of Jubilee play • Commanding acreage position – working the Jubilee play westwards and eastwards • Jubilee play expanded westwards with success at Tweneboa and now moves into Cote d’Ivoire • A petroleum t l system t proven att Venus V would ld de-risk d i k
Slide 25: Uganda exploration continues to deliver
Uganda exploration continues to deliver Exceptional success in Lake Albert Rift Basin • 27 wells drilled so far – 26 found hydrocarbons • 8 discoveries di i outt off 9 wells ll in i 2009 • 700 mmbo discovered (excluding Ngassa) • Over 1.5bn barrels potential yet to find Butiaba • Giraffe-Buffalo 300
Slide 26: Butiaba acceleration through new low cost technology
Butiaba acceleration through new low cost technology Low cost “GraviSeisTM” accelerates appraisal • Butiaba oil fields defined in 3D • Identifies Id tifi new prospects t • Significant cost savings (5% of 3D seismic) • Negligible environmental impact • Delivered in months not years y 3D “GraviSeisTM”
Slide 27: Exploration and Appraisal programme
Exploration and Appraisal programme Country Block Prospect Interest Gross upside Spud Date WCTP pp Greater Jubilee Appraisal Various 1,800 mmbo Sept p 09/2010 Ghana DWT Tweneboa 49.95% (op) 1,400 mmboe Q1 2010 WCTP/DWT E&A Campaign* Various 1,000 mmboe Q1-Q4 2010 Block 2 Ngassa 100% (op) 600 mmbo Q2
Slide 28: Conclusions – Aidan Heavey
Conclusions – Aidan Heavey 2009 Half-yearly Results Slide 28
Slide 29: Conclusions
Conclusions • Outstanding exploration portfolio • Delivering world class developments • Strengthened balance sheet • Well positioned to create significant further shareholder value 2009 Half-yearly Results Slide 29
Slide 30: Tullow Oil plc
Tullow Oil plc 3rd Floor, Building 11 Chiswick Park, 566 Chiswick High Road London, W4 5YS Tel: +44 20 8996 1000 Fax+44 20 8994 5332 Investor Relations Contact Chris Perry: chris.perry@tullowoil.com 2009 Half-yearly Results Slide 30