Tullow Oil CFO eyes exit as group swings into profit

Company’s net debt falls to $2.29bn in June from more than $3bn a year earlier

Tullow Oil said cost cuts helped drive its profit in the first half.

Tullow Oil said cost cuts helped drive its profit in the first half.

 

Tullow Oil said on Wednesday that chief financial officer Les Wood will step down by the end of next March, as the oil and gas group reported that it had returned to profit for the first half of the year.

The Irish-founded company also pushed its full-year production guidance to the upper end of its previous forecast, as it deferred a planned maintenance shutdown of its key Jubilee oil field off the Ghana coast in West Africa to early 2022, and to factor in an increase in output from its Simba field in Central Africa.

The group said it now expects expects 2021 output to fall between 58,000 and 61,000 barrels of oil equivalent per day (boepd) compared with its previous forecast of 55,000-61,000 boepd. Shares in the group jumped 5.4 per cent in London.

FILE PHOTO: A worker walks at a Tullow Oil explorational drilling site in Lokichar, Turkana County, Kenya, February 8, 2018. REUTERS/Baz Ratner/File Photo FILE PHOTO: A worker walks at a Tullow Oil explorational drilling site in Lokichar, Turkana County, Kenya, February 8, 2018. REUTERS/Baz Ratner/File Photo
 A worker at a Tullow Oil explorational drilling site in Kenya. Photograph: Baz Ratner/Reuters

Tullow has been focused for more than a year on selling off non-core assets in order to reduce its debt burden, with the group receiving $133 million (€112.6 million) in the first half of 2021 from the completion of Equatorial Guinea and Dussafu Marin permit sales.

The group carried out a major refinancing during the period, selling $1.8 billion of bonds and securing a new $500 million revolving credit facility. Net debt declined to $2.29 billion at the end of June from just over $3 billion a year earlier, it said.

Profit after tax

Tullow, which has been operating in Africa since 1986, said profit after tax came in at $92.7 million for the six months ended June, from a loss of $1.33 billion for the corresponding period last year, when the result was hit by a massive impairment charge as a result of a lower long-term oil price estimate.

“Following our comprehensive refinancing earlier this year, the culmination of a number of steps to strengthen the group, it is the right time for me to leave Tullow after five years as CFO,” said Mr Wood.

Rahul Dhir took over as chief executive of a then-embattled Tullow in July last year. He outlined a strategy plan last November, in which it aims to generate $7 billion in cash over a decade.

Tullow said in June that chairwoman Dorothy Thompson was planning to step down after nearly three years in the role. The search for her replacement “is progressing well” and a new chair is expected to be announced in the autumn, it said.