Tullow Oil PLC Profits Plummet 68%

The shares of Tullow Oil (LSE: TLW) fell 29p to 815p during early afternoon trading after the independent gas and oil company announced its full-year results.  

The FTSE 100 member, which operates in 25 countries and employs 1,415 people, reported revenue rising $303m, or 13%, to $2.6bn. Gross profit climbed by 7% to $1.4bn.

However, operating profit dropped 68%, or $704m, to $381m while earnings fell 73% to 18p per share.  

Tullow attributed the profit shortfall to exploration write-offs of $871m and profits from disposals falling by $670m to just $30m.

The full-year results also displayed an unchanged dividend for 2013 of 12p per share and a cash pot of $1.9bn, up 6%.

Tullow said it hoped to invest approximately $1bn into major exploration campaigns within Kenya, Norway, Ethiopia, Mauritania and Guinea.

Aidan Heavey, Tullow’s chief executive, said:

“The Group delivered another year of exploration and appraisal success and production growth and made significant progress with its key developments in Ghana, Kenya and Uganda which will deliver major increases in cash flow over the next 3-5 years.”

“An ambitious exploration and appraisal programme is planned for 2014 which is targeting opportunities in our core plays in Africa and the Atlantic margins.”

Mr Heavey added that Tullow was “aiming for resource additions of over 200 million barrels of oil” during 2014 and claimed his firm was poised for “an exciting year of growth in 2014 with an enviable portfolio of assets and opportunities.”

Of course, whether today’s full-year results as well as the wider prospects for the energy sector both combine to make Tullow a ‘buy’ right now is something only you can decide.