2013 FULL YEAR RESULTS 12 February 2014
2013 FULL YEAR RESULTS Disclaimer This presentation contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst Tullow believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Group’s control or within the Group’s control where, for example, the Group decides on a change of plan or strategy. The Group undertakes no obligation to revise any such forward-looking statements to reflect any changes in the Group’s expectations or any change in circumstances, events or the Group’s plans and strategy. Accordingly no reliance may be placed on the figures contained in such forward looking statements. Slide 2
2013 FULL YEAR RESULTS Agenda Section Page Introduction 4 Finance 6 Development and Operations 13 Exploration and Appraisal 18 Conclusion 26 Appendix 28 Slide 3
2013 FULL YEAR RESULTS TULLOW OIL PLC – 2013 FULL YEAR RESULTS AIDAN HEAVEY
2013 FULL YEAR RESULTS Delivering against our strategy 2013 2014 + Cash flow growth $1.9 billion High Margin Production Cash flow Ghana – 2016 East Africa – 2018 2013 Cash Flow Targeting 200mmboe p.a. 220mmboe Exploration & Appraisal Opening a new basin every 2-3 years 2013 Resource Adds Balancing and high-grading TEN & SNS Monetisation Options & Portfolio Management Accelerating cash flow Sales ongoing Major East Africa projects TEN PoD Selective Developments Undeveloped resources to transform Tullow First oil mid-2016 Strong balance sheet $650m bond Funding Diversified funding to support growth $2.4bn headroom Operational and financial flexibility to deliver substantial long term growth Slide 5
2013 FULL YEAR RESULTS TULLOW OIL PLC – 2013 FULL YEAR RESULTS IAN SPRINGETT
2013 FULL YEAR RESULTS 2013 full year results summary 2013 2012 Change Sales revenue $2,647m $2,344m +13% Gross profit $1,440m $1,345m +7% Administrative Expenses ($191m) ($219m) Profit on disposal $30m $702m ($871m) Exploration costs written off 1 ($671m) Operating profit $381m $1,185m -68% Profit after tax $216m $666m -68% Basic earnings per share 18.6c 68.8c -73% Dividend per share 12.0p 12.0p 0% Capital investment 2 $1,800m $1,870m -4% Cash generated from operations 3 $1,901m $1,777m +7% Net debt 4 $1,909m $989m +93% 1 Before tax refunds 2 2013 excludes Spring acquisition and includes Norway capex on an after tax refund basis 3 Before working capital movements 4 Net debt is cash and cash equivalents less financial liabilities Increased production generated higher revenues and operating cash flow Slide 7
2013 FULL YEAR RESULTS Net income 2013 v 2012 $m 1,250 1,000 74 52* 306 108 750 211 200 3 1 500 531 666 250 216 0 Net Income Price Volume Operating Other costs Exploration Net Finance Tax (excl. Gain on Net Income 2012 costs (*Other cash Write-offs Uganda CGT) disposal (net 2013 costs) of tax) Gross profit up 7%; increased volumes produced partially offset by higher operating costs and DD&A. Reported Net income however is lower due to the one-off gain on Uganda farm down in 2012 and higher exploration costs in 2013. Slide 8
2013 FULL YEAR RESULTS Sources and uses of funds $m Cash inflow $2,945m 2013 Net cash inflow $22m 3,500 • Operating cash flow $1,998m * (2012:$1,785m * ) Sources Uses • Disposals $80m (2012:$2,570m) 3,000 $6m $80m $269m • Net loan draw down $861m $252m (2012 repayment :$1,843m) 2,500 $861m • Share proceeds $6m (2012:$25m) $393m 2,000 $2,009m $1,998m Cash outflow $2,923m • Cash Capex $2,009m (2012:Capex $1,849m) 1,500 • Acquisition costs $393 million (2012 nil) • Cash tax paid $252m (2012:$264m) 1,000 • Finance Costs & fees, & Dividends $269m (2012:$380m) 500 Net cash inflow $22m 0 Cash Outflow Cash Inflow • Increase in cash balances Operating Cash flow Net loan draw down Share proceeds Disposals Capex Acquisitions Tax Finance costs and dividends * After working capital Slide 9
2013 FULL YEAR RESULTS 2014 capital expenditure $2.2 billion capex for full year 2014 • Ghana: Jubilee Phase 1A & TEN developments ($790m) 2014 $2,200m $770m $310m $1,120m • Kenya: Exploration and appraisal drilling ($310m) • Uganda: Appraisal drilling and development progress towards FID ($200m) 2013 $1,800m $910m $209m $681m • Other Africa: Maintaining mature production & high impact exploration ($740m) • ROW: selected high impact exploration ($140m) • ROW: Maintaining mature production ($20m) 2012 $1,870m $756m $378m $776m 2013 capital split: • 23% Ghana; 74% Africa Expl 2011 $1,432m $445m $591m $396m App $474m $515m Dev Europe South & East S. America Africa 0 500 1000 1500 2000 2500 & Asia $1,800m Notes: $811m i) 2013 Capital Expenditure excludes the Spring acquisition expenditure West & ii) 2013 and 2014 Exploration expenditure is net of Norwegian tax refund North Africa iii) 2011 Capital Expenditure excludes the Nuon and Ghana EO acquisition expenditure . Slide 10
2013 FULL YEAR RESULTS Highly diversified funding strategy Business Strategy Funding Strategy Financing Initiatives Additional cash flow from new production Commercial Bank Operating Cash ~$4bn debt facilities Facilities High Monetisation Exploration Flow Margin Options & Selective $3.5bn RBL and Appraisal ~$1.9bn in 2013 Production Portfolio Development $1bn + p.a. $500mm RCF Cash flow Management Fully Funded ~$333mm EFF Costs & Dividends Portfolio Debt Capital Management Markets Additional Surplus Exploration, $2.9bn $650 million Corporate Cash Cash Distribution Bond Uganda farm- issued November ‘ 13 down Funding strategy focused on liquidity, flexibility and diversification Slide 11
2013 FULL YEAR RESULTS TULLOW OIL PLC – 2013 FULL YEAR RESULTS PAUL McDADE
2013 FULL YEAR RESULTS Strong record of resource additions & reserves replacement 2P Commercial Reserves and 2C Contingent Resources Total Resource Potential as of 31 December 2013 as of 31 December 2013 South & East Africa 2P Commercial Reserves 41% 382.4 mmboe 1,409 6.2bn Europe, South America & Asia 2C Contingent Resources mmboe 12% boe 1,026.4 mmboe West & North Africa 47% Risked prospective upside 4.8bn boe Group Reserves and Resources (mmboe)* 1,600 2C Contingent Resources 2P Commercial Reserves 1,400 Reserves and Resources doubled over four year period 1,200 • 150% reserves replacement average over last 5 years 1,000 800 • 200 mmboe average resource add over last 7 Years 600 • Over 600 mmboe Uganda resources monetised in 2012 400 • Recent success in Kenya will provide further additions 200 • 75% oil across the portfolio 0 2009 2010 2011 2012 2013 * 2009-11 YE contingent resources restated following Uganda sale of 66.67% equity across Lake Albert licence in 2012 – 604 mmboe. Slide 13
2013 FULL YEAR RESULTS Strong cash flow supported by pipeline of future oil projects West Africa • 2013 actual prod: 84,200 boepd non-operated oil production • 2014 prod guidance: 79-85,00 boepd Mauritania Congo (Brazz) Cote d'Ivoire Eq Guinea Gabon 35 • Material growth potential 2016+ 30 25 20 kbopd 15 10 5 KENYA South Lokichar Basin 0 2012 2013 2014 2015 Development studies underway; single basin has potential to produce in excess of 100,000 bopd gross . Ghana – Jubilee field operated oil production 40 GHANA UGANDA 35 TEN development Lake Albert Rift Basin On track for first oil in mid- 30 Basin development targeting over 2016; FPSO gross capacity of 25 200,000 bopd gross production. 80,000 bopd. kbopd 20 15 10 Future Development Projects 5 Countries with ongoing operations Key oil producing countries 0 2012 2013 2014 2015 Slide 14
2013 FULL YEAR RESULTS West Africa – growing future high value oil production Non-operated production remains strong • Portfolio continues to deliver strong cash flow 2013 West African • Future investment opportunities remain attractive Revenue EG Jubilee – long term cash flow generation Gabon 14% 19% • Strong reservoir performance; well capacity >130kbopd Mauritania/ Côte d’Ivoire Congo 4% (Brazz) • Production increase awaiting gas export $2.25bn 5% • Long-term reserves recovery remains robust Ghana 58% TEN – operated deepwater project underway • Project execution underway and on-track • First oil expected mid 2016; plateau FPSO capacity 80,000 bopd • Significant future value and cash flow Over 100,000 bopd potential net production from West Africa post 2016 Key producing areas Slide 15
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