2007 was an exceptional year for Tullow. The Group recorded its largest ever discovery, the Jubilee field offshore Ghana, continued its successful exploration in Uganda, and generated record production, sales revenue, operating cashflow and growth in reserves and resources.
Tullow is capable of growing substantially in the coming years and has the strategy, the assets and the team to achieve this. The outlook for 2008 and beyond is extremely promising.
2007 Results summary
- The financial performance of the Group overall was solid, including record operating cashflow before working capital of £474 million.
- African assets have transformed the Group, driven by exceptional discoveries and strong production growth, up 21% to 40,300 boepd.
- The UK delivered broadly stable production, two new field developments and a successful gas discovery.
- South Asia reported a 143% increase in average production from gas field developments in Pakistan and Bangladesh.
Key financial highlights
2007 sales revenue increased by 10% as a result of increased sales volumes and higher oil prices, offset by weaker UK gas prices.
Operating profit before exploration activities declined 28% due to increased depreciation charges, partly offset by production growth and strong oil prices.
Increased finance costs and recognition of a loss on hedging significantly impacted profit before tax, which declined 57% to £114 million.
Record operating cashflow before working capital facilitated £370 million capital investment in the Group’s exploration and development activities.
The decline in basic earnings per share reflects lower UK gas prices and increased depreciation charges, exploration write-offs and interest charges.
The Board has a high level of confidence in the Group and its future profit potential and has proposed a 14% increase in the final dividend.
For further information on our results see the Finance review.
