Irish explorer Tullow Oil reported a drop in revenues and profits for the first half of the year following exploration write-offs – but the company remains confident African exploration will pay off.
The firm reported a 12% decline in gross profit, closing June 2014 on $673million. Year-on-year revenues were down by 6%, from $1.38billion in 2013 to $1.27billion this year.
The company also wrote off $400million in exploration costs from poor drilling results, particularly in Mauritania, Ethiopia and Norway.
Production dropped 12% on the previous year, from 88,600 barrels of oil equivalent per day (boepd) to 78,400 boepd in 2014.
But the dipped figures were offset by a strong performance for company’s West African oil assets, averaging at 63,900 boepd.
Continued exploration in Kenya delivered wildcat wells success with targets Amosing-1 and Ewoi-1, which contain an estimated 600million barrels of oil.
Further positive results are expected from Tullow’s continuing exploration and appraisal campaigns in Kenya, Norway, Suriname and Gabon.
“In the first half of 2014, Tullow made further important discoveries in Kenya and Norway and we have a concentrated exploration campaign planned for the next 18 months,” said Aidan Heavey, Tullow Oil’s chief executive.
“We have also made good progress with the TEN project in Ghana, with our discussions with host governments on our developments in East Africa and with our financing.
“With strong revenues and cash-flow from our existing production and a well funded and diverse balance sheet, Tullow is well placed for the remainder of this year and into 2015.”
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