Tullow is hit by $440m charge but sales surge

TULLOW Oil said yesterday said it expected record first half revenues but also revealed that it would be hit by $440m (£281m) of writedowns on projects.

Tullow said that it was on course to record revenue of $1.15bn (£734m) in the six months to 30 June, compared to $1.06bn the year before.

The FTSE 100 oil explorer said its first half figures would include a $700m pre-tax profit related to the disposal of two-thirds of its Ugandan interests to Total and China’s CNOOC for a headline $2.9bn.

It said first-half net debt would be about $700m, while capital expenditure on developments and exploration came in at around $900m.

Tullow’s share of production at its wells rose by three per cent to 77,400 barrels a day, and the firm said its offshore Jubilee field in Uganda was progressing well.

However, projects in Ghana and Namibia were shelved triggering costly writedowns.

Chief executive Aidan Heavey said: “The ongoing remediation of the Jubilee field is progressing well and significant exploration wells are planned for the East African Rift basins, the West African Transform Margin and the twin basins in South America in the second half of 2012.”

The company is scheduled to release its first-half results on 25 July.

Shares in the firm closed 1.9 per cent lower yesterday as investors registered their disappointment with the writedowns.