Tullow Oil returns to profit in 2024
By Josh White
Date: Tuesday 25 Mar 2025
(Sharecast News) - Tullow Oil posted a return to profit in its 2024 results on Tuesday, underpinned by continued strategic delivery, production optimisation, and progress on debt reduction.
The London-listed company reported profit after tax of $55m for the year, compared with a $110m loss in 2023, despite a modest decline in revenue to $1.54bn from $1.63bn.
Its result included $213m in exploration write-offs.
Adjusted EBITDAX was broadly flat at $1.15bn, while free cash flow came in at $156m.
Net debt was reduced to $1.45bn from $1.61bn, bringing gearing down to 1.3 times adjusted EBITDAX.
Liquidity headroom stood at $715m at year-end.
Capital expenditure fell sharply to $231m from $380m, while decommissioning costs were also lower at $60m.
Tullow successfully extended its $250m revolving credit facility to June 2025 and resolved the Ghana Branch Profits Remittance Tax arbitration, removing a potential $320m liability.
Full-year working interest production averaged 61,200 barrels of oil equivalent per day, slightly down from 62,700 daily barrels in 2023.
The year saw five new wells brought onstream at Jubilee, ahead of schedule and under budget, saving $88m gross and completing the campaign without safety incidents.
FPSO uptime at Jubilee and TEN averaged 97%.
Decommissioning in Mauritania was completed ahead of schedule and below budget, while a nature-based carbon offset agreement was reached with Ghana's Forestry Commission.
The company said it expected 2025 production to average 50,000 to 55,000 barrels of oil equivalent per day, including around 6,000 equivalent daily barrels of gas.
A new Ghana drilling programme with the Noble Venturer was set to start in May, with two wells due onstream in the third quarter.
Capital expenditure was forecast at $250m, primarily directed towards Ghana and West Africa, while further cost optimisation efforts were expected to reduce net general and administrative costs to $40m annually.
Tullow said it aimed to refinance its capital structure during 2025, following the repayment of its 2025 notes in early March.
Forecast free cash flow for the year was estimated between $100m and $200m at oil prices of $70 to $80 per barrel, including $50m in overdue gas payments from Ghana carried over from 2024.
The group also announced the planned $300m sale of its Gabon business, with completion targeted by mid-2025.
"In 2024 we had a number of successes but also some operational challenges, most notably with Jubilee production and a reserves revision, however there is now strong momentum within the business with a return to drilling at Jubilee, and the commencement of production optimisation and reserves maturation activities in Ghana," said interim chief executive and chief financial officer Richard Miller.
"In addition a number of key achievements have recently been realised, including the resolution of the Ghana Branch Profits Remittance Tax arbitration which eliminated a material overhang, the repayment of our 2025 senior notes and as announced on 24 March, the signed binding heads of terms for the sale of our Gabonese assets for a cash consideration of $300m.
"This will accelerate our deleveraging progress this year."
Miller said he was "clear on the levers required" to "unlock" Tullow's full potential.
"The team remains fully focused on our near-term priorities; advancing our refinancing plan, reducing costs, optimising production activities at Jubilee and TEN, and driving reserve growth.
"We will continue to maintain our financial discipline and prioritise investments that add value and deliver high returns.
"Tullow's core strength as a trusted partner with a cash generative business and attractive assets with reserves growth opportunities positions us well as we lay the foundations for value creation."
At 0846 GMT, shares in Tullow Oil were up 2.86% at 14.4p.
Reporting by Josh White for Sharecast.com.
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