Oil and gas multinational Tullow Oil has witnessed a rise in profits as it divested its remaining interest in Norway in 2017 and looked elsewhere.
A switch in focus from ventures in Europe and Asia to Africa and South America has seen the Irish founded oil firm increase profits by £194million, according the its fourth quarter report.
Tullow attribute new developments in South America to an increase of £391million in profit in 2016 to £585million in 2017.
The profit increase has also translated into a jump in total revenue of £325million from £908milion in 2016 to £1233million in 2017.
Paul McDade, CEO, said: “I am pleased to report that Tullow made excellent progress in 2017 as demonstrated by our substantial free cash flow generation and significantly reduced gearing. Strong production and disciplined cost management has allowed us to continue to both reduce debt and invest in our high-return production assets in Ghana.
The assessment of the results from our appraisal campaign in Kenya also fully supports progress towards a major development of the South Lokichar Basin. As we continue to retain a keen focus on the financial discipline that has served us so well, we are now also looking to grow the value of our business both through exploration, following a full re-set of the portfolio, and through other opportunities that the recovery in the sector will present.”
Les Wood, Chief Financial Officer, commented today: “Tullow’s balance sheet is considerably stronger at the start of 2018 following the $0.75 billion Rights Issue, strong free cash flow generation of $543 million and delivery of key objectives, including the successful $2.5 billion refinancing. Our gearing is approaching our target level of below 2.5x Net Debt/EBITDAX providing the financial and operational flexibility we need to invest in our business.
We have also driven down both our corporate and asset costs and have embedded financial discipline across the Group. Tullow is well placed to build on this strong financial platform in 2018.”