LONDON--Tullow Oil PLC(TUWLF) swung to a first-half net profit as significantly lower costs partially offset lower revenue due to weaker oil prices and reduced output from its Jubilee oil field in Ghana.
In the first half of 2016, Tullow's net profit was $29.7 million compared with a net loss of $67.9 million in the same period a year earlier.
The company said its TEN oil field in offshore Ghana was on track to deliver first oil in early August. TEN will increase Tullow's group net production by around 60% when it reaches capacity by the end of 2016, enabling the company to start paying down its big debt pile.
"The benefits from last year's cost-cutting program are evident in the financial results, the significant TEN capital expenditure is behind us and we have also made good progress on the Jubilee Turrett project," said Tullow Chief Executive Aidan Heavey.
Last month, Tullow warned it was cutting its full-year production guidance range to 62,000-68,000 barrels of oil equivalent a day following problems with a production platform at the Jubilee oil field in Ghana.
In the six months ended June 30, revenue fell 34% to $541 million due to weaker oil prices and lower oil and gas output from West Africa over the period. Tullow's west Africa output net to the company averaged 51,800 barrels of oil equivalent a day.
Tullow has insurance in place which covers the loss of production and revenue from Jubilee.
Net debt reached $4.7 billion at the end of June compared with $3.6 billion at the same time a year earlier.
This is a rally waiting to start, there production is going up 60% in 10 days and their cost are falling, and they are already making money. Cheers
