Tullow reports after-tax loss of $1.2bn for last year

London-listed group says it expects to generate $500m in net cashflow this year

 Storage tanks at Tullow Oil’s Ngamia 8 drilling site in Lokichar, Turkana County, Kenya. Photograph: Baz Ratner/Reuters

Storage tanks at Tullow Oil’s Ngamia 8 drilling site in Lokichar, Turkana County, Kenya. Photograph: Baz Ratner/Reuters

 

Tullow Oil has reported an after-tax loss of $1.2 billion for last year after writing off exploration assets and other impairments.

The London-listed group said it expects to generate $500 million in net cashflow this year on the basis of an oil price of $50 a barrel, which is more than $15 below the current price.

The company said every $10 increase delivers roughly $100 million in “incremental pre-financing cash flow”.

The recent bounce in oil prices on the back of Opec’s decision to leave output unchanged has bolstered Tullow’s balance sheet but its debt levels remain high.

The company said its net debt stood at $2.4 billion at the end of last year.

“After a year of significant change for Tullow, we are now executing a robust, cash-generative business plan which is focused on our most productive assets,” said chief executive Rahul Dhir.

“We have transformed our cost base, implemented rigorous capital discipline and are well placed to benefit from higher oil prices. We will start a multi-year multi-well drilling programme in Ghana next month to deliver sustainable and profitable production growth.

“Our self-help initiatives will deliver approximately $1 billion, including over $700 million from asset sales in the past year.

Strong business delivery increased liquidity, and improving commodity prices support constructive refinancing discussions,” he added.

“Importantly, we are also announcing today that we intend to be net zero by 2030 as part of our commitment to sustainability. This commitment is in line with our desire to work closely with host communities and governments and our investors to deliver a long-term and sustainable business,” said Mr Dhir.