LONDON -- On Jan. 9, 2017, Tullow Oil plc announced that it had agreed to farm-down 21.57% of its 33.33% interests in Exploration Areas 1, 1A, 2 and 3A in Uganda to Total E&P Uganda B.V. for a total consideration of $900 million. CNOOC Uganda Limited has notified Tullow that it has exercised its pre-emption rights under the joint operating agreements between Tullow, Total and CNOOC to acquire 50% of the interests being transferred to Total on the same terms and conditions that were agreed between Tullow and Total (including as to the amount, structure and timing of the consideration payable to Tullow).
Tullow will now work with Total and CNOOC to conclude definitive sale documentation in relation to the farm-down. Completion of the farm-down is subject to certain conditions, including the approval of the Government of Uganda. Once the farm-down has completed, Tullow will cease to be an operator in Uganda but will retain a presence in-country to manage its non-operated position.
LONDON--The U.K.'s largest independent oil explorer Tullow Oil PLC (TLW.LN) Wednesday reported a smaller than expected loss in underlying earnings for the first half of the year as hedging helped to offset some of the impact of lower oil prices on revenues.
The Africa-focused explorer warned earlier this month that its gross profit would fall significantly. It also had lower production in Europe because of divestments.
"Our financial results...are in line with market expectations and reflect the resetting of our business in response to the weaker oil price," Tullow Chief Executive Aidan Heavey said in a statement.
While oil prices have posted a modest recovery in the past six months up from a trough at the end of last year, they are still less than half what they were in the first half of 2015, hitting the exploration and production sector hard.
Unlike the major oil companies BP PLC and Royal Dutch Shell PLC, explorers don't have other parts of their business to fall back on when oil prices are low, such as refining and marketing.
Underlying earnings, or the loss from continuing operations before tax was $10 million in the first half of 2015, compared with a loss of $29 million a year earlier.
A consensus of 14 analysts provided by the company forecast a deeper loss of $74.3 million.
Tullow reported a pre-tax loss of $29 million in the first half of 2014 primarily due to a significant increase in exploration costs written off. It reported a net loss of $67.9 million in the first half of 2015 compared with a net loss of $75.3 million in the same period a year earlier.
Half-year revenues were down 35% at $819.6 million compared with $1.265 billion in the first half of 2014 as it was affected by declining oil prices and lower production due to asset sales.
The company's output in the first half of the year averaged 74,600 barrels of oil equivalent a day, due to strong West Africa output.
Net debt increased to $3.6 billion in the first half to June 30 compared with $2.8 billion in the same period a year earlier.
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LONDON--Tullow Oil PLC (TLW.LN) said Wednesday that a sharp fall in impairment charges has resulted in a narrowed pretax loss for 2016, and the company will continue to focus on capital allocation, financial flexibility and cost reduction efforts in the new year.
The oil explorer said its pretax loss for the year ended Dec. 31, 2016, narrowed to $908.3 million from $1.29 billion a year earlier, despite a 21% decline in revenue to $1.27 billion. Impairment charges fell 59% to $167.6 million.
The company's core west African operations recorded average oil production of 65,500 barrels of oil per day, or bopd, in 2016 and production in the new year is anticipated to average between 78,000 bopd and 85,000 bopd. Production from European operations is expected to average between 6,000 and 7,000 barrels of oil equivalent per day in 2017.
Tullow Oil hasn't declared a dividend for the year.
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