Tullow Oil’s net profit last year came in at a about a fifth of analysts’ expectations, driven by the Irish-founded explorer writing off $213 million (€197 million) of exploration costs, mainly in relation to asserts in Kenya.
The Africa-focused company reported on Tuesday that its swung into a net profit of $55 million last year from a loss of $110 million in 2023. However, the results was well below the consensus call among analysts for a figure of almost $250 million, according to Bloomberg data.
The writedowns were led by a $145 million impairment against assets in Kenya, where plans to develop oil project in the arid Turkana region in the northwest of the country has been hit by delays with securing governmental approval and a strategic partner.
Tullow assumed sole ownership of the Turkana oil deposits in 2023 after its joint venture partners, TotalEnergies and Africa Oil, decided the quit the project.
Tullow Oil also write off $55 million of assets in Argentina and Cote d’Ivoire. It also took a $10 million charge against assets in Gabon – ahead of an agreement, announced on Monday, to sell its entire Gabonese portfolio Gabon Oil Company, which is owned by the government of the west African state, for $300 million.
Tullow had said in January that it was considering selling certain non-core assets to accelerate debt reduction. The Gabon assets sale will reduce its net borrowings to $1.15 billion. The group’s net peaked at $4.8 billion at the end of 2016.
The group plans this year to refinance a $1.4 billion bond ahead of it falling due for redemption in May 2026.
The chief executive that oversaw a stabilisation of Tullow Oil over the past five years, Rahul Dhir, stepped down last month. The group’s chief financial officer, Richard Miller, has been also serving as interim CEO since then, though Mr Dhir will be available to the company until early June to ensure a “smooth transition”.
The company saw its share price plunge about 85 per cent in the 18 months before Mr Dhir took charge in 2020, amid a series of drilling and production disappointments, exits of its then chief executive and exploration director, massive asset writedowns and warnings about potential cash shortfalls.
Tullow was the subject of a bid approach late last year from US oil and gas group Kosmos Energy. However, the suitor subsequently walked away.
Tullow, which was founded by one-time Aer Lingus accountant Aidan Heavey in 1985, closed its Dublin office in 2020 as part of a round of corporate restructuring and quit the Irish stock market last year. It had moved its domicile to the UK two decades ago.
