Oil exploration company Tullow Oil beat analysts' forecasts with a 51 per cent jump in net profit today, thanks to higher output and strong oil prices, but added agreement on a key project had slipped.
Tullow said its first-half net profit was $181.1 million, ahead of analysts' forecasts.
Tullow shares traded down 0.38 per cent to 390p at 7:11am compared to a 0.04 per cent rise in the DJ Stoxx European oil and gas sector index.
Chief financial officer Tom Hickey said in a telephone interview that the outperformance of expectations was mainly due to lower than expected taxes and the accounting treatment of hedging contracts. Tullow's operating profit was bang in line with forecasts at 161 million pounds.
Chief operating officer Paul McDade said agreement on a plan to supply gas to a new Namibian power station that would be the country's biggest electricity source had slipped to 2007 from mid to late 2006.
Tullow is in talks with the Namibian government and the state power company, NamPower, which will build the plant. "It's proving more challenging (than foreseen)," McDade said.
The project would create a market for gas from the Kudu field off Namibia's southern coast, one of Tullow's largest. Investors had hoped for news of progress on the project.