Tullow Oil’s earnings rise 500 per cent

Marion Dakers
OIL explorer Tullow Oil’s profits surged last year thanks to the ramp up of a major new field in Ghana and the buoyant price of crude, allowing the company to announce a doubling of its dividend yesterday.

Tullow said pre-tax profits rose 499 per cent to $1.07bn (£683m) in 2011, on sales revenues up 111 per cent to a record $2.3bn.

Oil and gas production rose 35 per cent to average 78,200 barrels of oil equivalent per day (boepd).

But output at the FTSE 100 firm’s Jubilee field in Ghana was lower than first expected, and the company said it planned to work on the field this year to improve output.

Tullow said it was now eyeing start-up of its Ugandan fields in 2016, after delays to regulatory clearance, but that it was working on “potentially transformational” exploration work in Kenya, Ethiopia and Senegal this year.

The firm intends to spend $2bn on development and exploration this year, up from $1.2bn in 2011.

Analysts said the results were around seven per cent ahead of forecasts, but that lower production outlook at Jubilee would keep a lid on the share price for now.

The firm also announced that Transocean non-executive director and former National Grid finance boss Steve Lucas will join its board in May.

The firm’s shares rose 1.9 per cent to close at 1,482p.