Tullow Oil 1st Half Net Profit -47%, Cuts 2013 Production Forecast

LONDON--Tullow Oil PLC (TLW.LN), an independent oil and gas exploration and production group, Wednesday reported a 47% fall in net profit for the first half of 2012, due mainly to impact of the Ugandan farm-down profit on disposal last year, with production up 14%, but cut its 2013 average production forecast to 84,000-88,000 barrels of oil equivalent per day, or boepd, from 86,000-92,000 boepd.

MAIN FACTS:

-Sales revenue for half year ended June 30 $1.35 billion (2012: $1.17 billion), +15%

-Gross profit $764 million (2012: $679 million), +13%

-Profit on disposal - (2012: $702 million)

-Exploration costs written off $176 million (2012: $451 million)

-Operating profit $500 million (2012: $834 million), -40%

-Profit before tax $486 million(2012: $829 million), -41%

-Profit after tax $313 million (2012: $567 million), -45%

-Net profit $292.2 million (2012: $546.2 million)

-Interim dividend per share 4.0 pence (2012: 4.0 pence)

-Operating cash flow before working capital $1.02 billion (2012: $875 million), +16%

-Production, barrels of oil per day, or boepd, working interest basis, 88,600 (2012: 77,400), +14%

-Capital expenditure on an accruals basis amounted to $804 million for the first half of 2013 (2012: $926 million) with 36% invested in development activities, 14% in appraisal activities and 50% in exploration activities

-Balance sheet remains strong with net debt of $1.7 billion and $1.7 billion headroom.

-13 exploration wells and 14 appraisal wells drilled to date in 2013 with a 63% overall success ratio.

-Basin-opening E&A success continues onshore Kenya; following success at Etuko-1, Pmean resources are expected to be well in excess of 300 million barrels of oil, or mmbo, exceeding the threshold for development studies to start.

-Five campaigns including 20 exploration wells planned for 2H 2013 targeting multiple basins in Kenya, Ethiopia, Mozambique, Mauritania and Tullow's first operated well in Norway.

-TEN Plan of Development, or PoD, approved by the Government of Ghana; major contracts currently being awarded with First Oil expected in mid-2016; farm-down process has been initiated for a development carry.

-Shares closed Tuesday at 1027 pence valuing the company at 9.33 billion pounds.

-Write to Ian Walker at [e-mail]