Tullow Oil posted half-year results in line with expectations yesterday, despite the continuing weak oil price leading to significant drops in revenue and profit.
Revenue was down by 35 per cent in the six months to 30 June, from $1.27bn (£811m) to $820m, while gross profit plummeted by 50 per cent, from $681m to $342m.
The company recorded a pre-tax loss of $10m in the first half, narrowing the $29m loss reported in the same period of last year.
Chief executive Aidan Heavey said the drop in revenue was down to the fall in oil price and asset sales, but added that the group’s hedging programme had offset some of the impact.
Heavey said Tullow had made good progress with its development projects in Africa. The firm’s Ten Project is on schedule and on budget for first oil in mid-2016, and West Africa oil production is projected to grow to around 100,000 barrels of oil per day in 2017.
“We also continue to build an inventory of exploration prospects to provide options for growth in the future,” Heavey added.
Analysts deemed the results positive, noting that full-year guidance was not reduced. Stephane Foucaud at First Energy said: “The shares are now offering value and given the materiality of the firm’s resources, we believe that Tullow could be a realistic potential take over target at current levels.”
Shareholders were less impressed with the numbers, and the stock dipped 0.7 per cent to close at 235.50p.