Tullow posts €22.6m profit on strong gas and oil prices

Tullow Oil has reported a 51 per cent increase in first-half pre-tax profit to €22.6 million, helped by strong oil and gas prices and a good performance from its gas interests in the Southern North Sea.

The independent oil and gas company, which completed the $570 million (€465 million) acquisition of Energy Africa in May, said turnover was up by 16 per cent to £76.5 million (€112.1 million) with the Southern North Sea accounting for 68 per cent of revenues.

This was down from 87 per cent last year as Tullow's Espoir field in the Ivory Coast and one month's revenue from Energy Africa made up the balance.

Basic earnings per share rose to 2.37 pence per share from 1.83 pence and the group announced an interim dividend of 0.5 pence.

Chief executive Mr Aidan Heavey said Tullow participated in five successful exploration wells in the first half, discovering gas in the UK North Sea and in Bangladesh.

In Uganda, its Turaco well encountered hydrocarbons while it also reported successes in Gabon and Congo.

The company wrote off exploration costs of £4.4 million relating to three unsuccessful wells in Bangladesh, Gabon and Morocco.

Tullow is currently producing around 53,000 barrels of oil equivalent per day (boepd), with around 29,000 boepd accounted for by the group's interests in Africa.

It expects production in the second half to be in the order of 53,000 to 54,000 boepd.

Tullow said the process of integrating Energy Africa was well advanced and it looked forward to the coming year "with confidence and optimism".

"Progress in the three months since completion has been considerable with interests increased in selected acreage, development plans for proven discoveries advanced and a series of positive drilling results achieved," chairman Pat Plunkett said.

The group said operating cashflow rose to £57.5 million from £46.1 million. Net debt at the end of June stood at £85.8 million, up from £30.6 million at the same date in 2003.