Tullow Oil Profits Surge Amid Rising Crude Prices

Tullow Oil, focusing on West Africa, posted a significant increase in profit for the first half of 2024, mainly due to higher crude prices driven by OPEC+ production cuts, Middle East tensions, and anticipated U.S. interest rate cuts. The company aims to reduce debt and maintain sustainable free cash flow.

Tullow Oil, a West Africa-focused oil and gas company, has reported a significant rise in profits for the first half of 2024, bolstered by higher crude oil prices. The increase in crude prices was largely driven by OPEC+ production cuts, escalating tensions in the Middle East, and expectations of interest rate reductions from the U.S. Federal Reserve.

The company reported that its realised oil price after hedging was $77.7 per barrel, a noticeable increase from $73.3 per barrel in the previous year. CEO Rahul Dhir stated that Tullow is entering a period of lower capital expenditures in the latter half of the year and plans to continue reducing debt through sustainable free cash flow generation, aiming to bring net debt below $1 billion by 2024.

Tullow's total production for the first half of the year rose slightly to 63.7 thousand barrels of oil equivalent per day (kboepd) from around 62 kboepd last year. Despite this increase, production did not meet expectations due to underperformance at the Jubilee field. Nevertheless, the company remains optimistic about its year-end production forecast. Tullow shares saw a 0.9% increase, closing at 27.68p, with a reported profit of $196 million, up from $70 million the previous year.

(With inputs from agencies.)