Oil and gas firm Tullow Oil Plc. (TLW.L) on Friday said it expects full year revenue to increase from the prior year, even as production fell short of guidance owing to a shutdown. The firm expects to take $670 million in write off for the year.
Total revenue for 2012 is expected to be of the order of $2.35 billion compared to $2.30 billion in the previous year.
Group working interest production for 2012 averaged 79,200 barrels of oil equivalent per day, or boepd. The oil firm had previously guided average net production of 80,000 to 84,000 boepd for the full year.
Tullow said today that the slight shortfall from the most recent guidance was caused by the enforced shutdown of its non-operated production in the CMS area of the UK in early December 2012 following a safety incident. Production resumed to normal levels at the end of the month.
According to the company, after the start-up of two Jubilee Phase 1A wells and the successful acid stimulations, the field is currently producing around 110,000 bopd. The total well production capacity is now over 120,000 bopd, allowing the current FPSO capacity to be tested over the coming weeks.
For 2013, production guidance is in the range of 86,000 to 92,000 boped which includes all gas assets currently held for sale.
Tullow’s unsuccessful exploration write-off for 2012 activities is expected to increase to $299 million from $121 million, due mainly to a licence relinquishment of $85 million in Guyana.
Combined with the asset value reduction of $371 million reported in the first half of 2012, the total write off for the year is expected to be around $670 million.
Realised commodity prices in 2012 were in line with the average levels in 2011. The realised oil price was $107.6/bbl post hedge and the realised UK gas price was 58.5p/therm.
Capital expenditure amounted to $1.9 billion and the company sees total capital expenditure of $2.0 billion in 2013, excluding acquisition costs. Net debt at December 31, 2012 was around $1.0 billion.
Out of the capital expenditure budget of $2.0 billion in 2013, Tullow has over 40 wells in its high-impact exploration and appraisal program, representing an investment of $0.9 billion.
Aidan Heavey, CEO, said, ”…continuing process of portfolio management, alongside increased Jubilee production and a strengthened balance sheet, provides a strong base from which our exploration-led growth strategy can continue to deliver. Tullow is now well positioned for a very successful 2013 and growth beyond.”
The company is scheduled to report full-year results on February 13.
TLW.L is falling 2.9 percent in early morning trade at 1,189.72 pence.
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by RTT Staff Writer
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