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Tullow Oil plc (LON:TLW)'s half year revenue fell $4m to $727m, as sales volumes fell 14.7% to 65,800 barrels of oil equivalent per day (boepd), offset by a 17.4% rise in the realised oil price to $60.8 a barrel.
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A large reduction in exploration costs written off and impairment charges meant the group reported a pre-tax profit of $213m, up from a $1.4bn loss last year.
The group now expects full year production volumes to be at the upper end of the guidance range, at 58,000 – 61,000 boepd.
The shares rose 3.0% following the announcement.
A Look At Tullow Oil's Financials
“Tullow Oil is in a much better position. Looking at the financials, the group has been buoyed by higher oil prices, lower impairment charges and the cost benefits of having a smaller workforce . Debt is going in the right direction, and when all's said and done, progress has been swifter than feared. However, this doesn't mitigate Tullow's biggest threat.
The oil and gas industry is rapidly changing, with demand for renewable energy on the up. With environmental issues at the forefront of society's psyche, smaller, debt-heavy companies like Tullow face an uphill battle over the long-term. There are fewer resources to fund a pivot towards alternative energy, which could be problematic. For now, Tullow has worked hard to trim fat and reaffirm its foundations, but future performance might not be quite so slick.”
Article by Sophie Lund-Yates, equity analyst at Hargreaves Lansdown
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