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September 2016
Overview presentation
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 Groups control or within the Groups 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 Groups expectations or any change in circumstances,
events or the Groups plans and strategy. Accordingly no reliance may be placed on
the figures contained in such forward looking statements.
Slide 2
Overview presentation
OVERVIEW PRESENTATION
Overview presentation
319mmboe
2P Reserves
951mmboe
2C Contingent
Resources
305,634
Sq km acreage
Figures at HY 2016
Overview presentation
High Margin
Production
Cash flow
Exploration
and
Appraisal
Monetisation
Options &
Portfolio
Management
Selective
Development
Surplus Cash
Additional
Exploration, Cash
Distribution
Costs &
Dividends
Capital focus on low-cost West Africa oil assets generating material future cash flows
Continue to build industry leading exploration portfolio in Africa and Atlantic Margins
Exploration focused on high-impact, cost efficient, onshore and shallow water wells
Strong balance sheet provides foundations to deliver long term value to shareholders
Slide 5
Overview presentation
TEN field
East Africa
Development
Jubilee field
Slide 6
Overview presentation
Financially robust
2014 / 15
2016
Slide 7
2017+
Overview presentation
OVERVIEW PRESENTATION
Overview presentation
Capex reductions
Capex c.$1.0bn forecast for 2016 (down 41% vs FY 2015); significantly lower run rate post TEN completion
$30m profit after tax despite lower oil prices and reduced Jubilee production
New production
Continued benefits of long-term hedging programme; Mark-to-Market position of $322m at 30 June 2016
Insurance in place for Jubilee turret
Bank facilities
Convertible bond
Decisive actions taken to manage costs, hedge volatility and to further diversify sources of funding and
increase liquidity; Headroom plus free cash of $1.0bn ($1.3bn including the convertible bond)
Slide 9
Overview presentation
1H 2015 ($m)
Sales revenue
541
820
Gross profit
182
342
(69)
(7)
(3)
(59)
(17)
(100)
(25)
(44)
(88)
11
-
Operating profit
27
97
24
(10)
(108)
50
30
(68)
Capital investment
589
783
256
515
4,721
3,610
Administrative expenses
Restructuring costs
Loss on disposal
Exploration costs written off 1
Impairment of property, plant and equipment
Provision for onerous contracts
Net debt3
1
3Net
Overview presentation
(68)
30
30
53
0
49
63
-100
$m
29
(144)
32
18
-200
IMPACT OF JUBILEE
-300
Lower volumes
109
(196)
55
-400
(175)
30
$m
(18)
Reduced DD&A
62
Tax
46
TOTAL
(85)
-500
June 2015
Price
Volume
Hedging
Cash
operating
costs
DD&A
Admin
expenses
Tax
Net Financing
Other
June 2016
Profit after tax for 1H 2016 despite lower realised prices and reduced production.
Performance supported by reduced costs / DD&A plus hedging and FX gains.
Slide 11
June 2016
excl. Jubilee
issue
Overview presentation
Loss
adjusters
appointed
Root Cause
Analysis
commenced
Feb 2016
Feb 2016
Apr 2016
Spread moor
FPSO
Temporary
heading
Permanent
heading
Install
Deepwater
Offloading
Buoy
2016
2017
2018
c.$75m
c.$115m
c.$30m
8 12 weeks
4 6 weeks
c.74,000
c.70,000
c.93,000
2H 2016
Slide 12
Overview presentation
2H 2016
2017
2018
38,500
31,000
10,500
74.28
65.30
60.47
150
146
26
Significantly mitigated lower oil prices during the TEN development; forward cover also in place
Slide 13
Overview presentation
Drawings
$bn
Overall
liquidity
$1.3bn
0.3
Headroom
incl. convertible
$1.0bn
1.0
RBL
Corporate
Facility
bond
0.43
0.3
(0.1)
(0.3)
(0.1)
3.5 2
3.2
4.7
Covenants
Public
debt
1
1.3 1
1.3
(1)
(2)
(3)
Two High Yield Bonds each at $650m (Nov 2020, April 2022);
Reserve Based Lend facility, 6 monthly amortisation from Oct 2016
Revolving Corporate Facility, reduces to $800m in April 2017; $200m accordion feature agreed
4.7
Overview presentation
Jubilee Turret
Exploration
East Africa
2000
Jubilee
1500
$m
1000
1H
2016
Capex
options
500
2014
2015
1H 2016
2H 2016f
Notes:
i) Exploration expenditure is net of Norwegian tax refund
ii) Capital costs exclude decommissioning costs and onerous rig contracts
2017f
Ability to adjust future capex to reflect oil price and market conditions
Slide 15
Overview presentation
Financial
resilience
Prioritising
deleveraging
Managing
liquidity
Slide 16
Overview presentation
OVERVIEW PRESENTATION
Overview presentation
Ghana
CWA
100
80
60
40
20
2015
1H 2016
2016f
2017f
2018f
West Africa
producing countries
Overview presentation
15
Opex $/bbl
10
0
2014
2015
2016f
2017f
2018f
1200
1000
Ghana:
$m
800
600
TEN capex:
-
400
200
Jubilee capex
-
2015
1H 2016
Incremental Investment
2016f
Ghana
2017f
Jubilee
2018f
TEN
WANO
Note: Underlying Opex and Capex data excludes impact of Jubilee Turret project
Slide 19
Overview presentation
Long-term
solution
designed
Feb 2016
April 2016
June 2016
Spread moor
FPSO
Temporary
heading
Permanent
heading
Install
Deepwater
Offloading
Buoy
2016
2017
2018
Costs
Gross Capex
c.$85m
c.$200m
c.$50m
Gross Opex
c.$115m
c.$105m
c.$35m
8 12 weeks
4 6 weeks
~100,000
~100 110,000
~110 120,000
c.74,000
c.70,000
c.93,000
Production Impact
Shut-in
Slide 20
Overview presentation
Slide 21
Overview presentation
$bn
2.0
1.5
1.0
1H
0.5
2H
-
2013
Slide 22
Phased drilling of
infill wells
2014
2015
2016
2017
2018
2019
2020
Overview presentation
Slide 23
Overview presentation
30%
25%
20%
15%
10%
5%
0%
1
10 11 12 13 14 15
Overview presentation
Slide 25
Overview presentation
OVERVIEW PRESENTATION
Overview presentation
Strong portfolio & attractive programmes adapted for current environment & longterm upside
Overview presentation
Liza-1 deepwater oil discovery significantly de-risks the basin & Tullows regional acreage
Araku estimated well cost of c.$14 million net to Tullow (Operator 30%)
Overview presentation
Kaieteur estimated well cost of c.$15 million net to Tullow (non-op 30%)
Slide 29
Overview presentation
Activity
Uganda
Lake Albert
Basin
Kenya
North
Turkana Basin
North Lokichar
Basin
South Lokichar
Basin
Kerio Basin
Kerio Valley
Basin
Overview presentation
Slide 31
Overview presentation
LAKE MWERU
WANTIPA
BASIN
Overview presentation
Overview presentation
Game-changing opportunities
Slide 34
Overview presentation
OVERVIEW PRESENTATION
Overview presentation
Ghana acreage
Slide 36
Overview presentation