Irish oil firm Tullow is expected to report a large loss when it reveals its full-year results on Wednesday, after what analysts have described as a “tough year”.
Last month, the company announced that it had written off $2.3bn (£1.5bn) worth of assets and exploration work, following a series of difficulties over the past 12 months, including several dry wells and a general decline in oil prices.
It is anticipated that Tullow, which is listed in both Dublin and London, will report a revenue of $2.29bn and a net adjusted loss of $671m for 2014. This is compared to revenue of $2.64bn and an adjusted net profit of $169m in 2013. Shares in the company are down by almost 50 per cent over the past year.
IG Group’s David Madden said that part of the problem for the firm lies in the fact that it has no downstream division to rely on during a period of low oil prices, and added that “the stock is being punished for it”. He highlighted the fact that Tullow is cutting capital expenditure for 2015 to $200m, a 77 per cent decline on the figure for last year. “Tullow Oil has had a terrible 12 months and the outlook for the company still looks uncertain,” stated Madden.
Meanwhile, analysts at Barclays said the results are “an opportunity to highlight the firm’s financial strengths” – low operating costs and substantial hedging.