Tullow Oil plc · LSE:TLW
Tullow Oil — Investor Presentation (January 2017)
33 slides from Tullow Oil's investor presentation, January 2017
Slide 1: Tullow Oil plc Overview presentation
Overview presentation Tullow Oil plc January 2017
Slide 2: Disclaimer
Overview presentation Disclaimer This presentation contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst Tullow believes the expectations reflected herein to be reasonable i
Slide 3: Overview presentation
Overview presentation OVERVIEW PRESENTATION
Slide 4: A leading global independent exploration & production company
Overview presentation A leading global independent exploration & production company 19 319mmboe 951mmboe 286,658 2C Contingent Sq km acreage Countries 2P Reserves Resources R&R Figures at HY 2016 Established record of delivering successes • The business has developed organically and through acquisit
Slide 5: The Tullow strategy
Overview presentation The Tullow strategy Additional cash flow from new production Monetisation High Margin Exploration Selective Options & Production and Development Portfolio Cash flow Appraisal Management Costs & Dividends Additional Surplus Cash Exploration, Cash Distribution • Capital focus on
Slide 6: A sustainable future production base
Overview presentation A sustainable future production base Key production and development Countries with ongoing operations Key oil producing countries TEN field • First oil achieved in August 2016 • FPSO gross capacity of 80,000 East Africa bopd (net WI ~35,000 bopd) Developments • Gross production
Slide 7: Well-positioned for growth
Overview presentation Well-positioned for growth Decisive action taken Financially robust Fit for new oil era Re-set to deal with Step change for Tullow Flexible portfolio with low oil prices: with TEN first oil: major growth potential: Moved early and decisively; Increase in oil production and Prof
Slide 8: Overview presentation
Overview presentation OVERVIEW PRESENTATION
Slide 9: Proactive financial management
Overview presentation Proactive financial management Realising the benefits of early actions Significant cost savings • 1H 2016 gross G&A of $215m, down 32% from 1H 2015 • 1H net admin expenses of $69m, down 31% from 1H 2015 • Good progress on underlying operating costs Capex reductions • 2016 capex
Slide 10: Affirmation of Jubilee insurance cover
Overview presentation Affirmation of Jubilee insurance cover Spread moor Install Revised Long-term FPSO Deepwater Identification operating solution Temporary Permanent Offloading of issue procedures designed heading heading Buoy* ✓ ✓ ✓ Feb 2016 April 2016 June 2016 2016 2017 2018 Costs - Hull & Mach
Slide 11: Industry leading hedge position
Overview presentation Industry leading hedge position Hedge strategy unchanged • Tullow has proactively hedged production to protect revenues over the last 10 years • Significant liquidity benefit through protecting future revenues and generating RBL debt capacity • Prudent during periods of higher
Slide 12: Significant Capex reduction in 2017 post TEN project
Overview presentation Significant Capex reduction in 2017 post TEN project 2500 2016 Capex of c.$0.9bn Exploration East Africa • Down from initial forecast of $1.1bn West Africa non-op (incl Europe) 2000 TEN 2017 Capex of c.$0.5bn Jubilee - Ghana c.$90m - Kenya pre-development c.$100m $m 1500 - West
Slide 13: Managing balance sheet, debt diversification and liquidity
Overview presentation Managing balance sheet, debt diversification and liquidity Committed Debt Facilities Drawings $bn Overall • $1.0bn facility headroom plus free cash at liquidity 31 December 2016 (net debt $4.8 bn) 6 c.$1.bn 1.0 Headroom RBL • Successful routine redeterminations in April and Oct
Slide 14: Financial strategy provides flexibility for future growth
Overview presentation Financial strategy provides flexibility for future growth • Continuing to drive down Opex and G&A • Significant hedging in place for 2017 Financial • Capex flexibility post TEN; 2017 c.$500m resilience • Jubilee turret project being managed; insurance in place • TEN first oil o
Slide 15: Overview presentation
Overview presentation OVERVIEW PRESENTATION
Slide 16: Significant West African oil production growth post TEN
Overview presentation Significant West African oil production growth post TEN 2016 West Africa oil production: 65,500 bopd 2017 guidance: 78 - 85,000 bopd West Africa Oil Production 120 Jubilee Turret Ghana CWA 100 80 60 40 20 0 2015 2016 2017f 2016 Europe gas production: 6,200 boepd West Africa 201
Slide 17: Jubilee – long-term asset with flexible investment opportunities
Overview presentation Jubilee – long-term asset with flexible investment opportunities Performance in 2016 • 2016 average gross production: 73,700 bopd • Gas exports continue to onshore processing facility Greater Jubilee Full Field Development • GJFFD plan submitted to Government of Ghana Dec 2015
Slide 18: TEN Project – industry leading project execution
Overview presentation TEN Project – industry leading project execution First Oil achieved on 18 August 2016 • Production steadily ramped up • Project delivered on time and within budget Exceptional project delivery • Focused and empowered Tullow project team • DRILLING Robust project execution and c
Slide 19: Firming-up Kenya’s oil resources ahead of development
Overview presentation Firming-up Kenya’s oil resources ahead of development Appraisal to continue • South Lokichar resource - 750 mmbo; 1 bnbo upside • Successful extended well tests in Amosing & Ngamia • Water injection testing ongoing • 3D seismic highlights additional upside in Amosing & Ngamia •
Slide 20: Progressing Uganda’s Lake Albert basin development
Overview presentation Progressing Uganda’s Lake Albert basin development Substantial farm-down announced in January 2017 • Substantial farm-down of assets to Total for $900m consideration • $200m cash - $100m on completion, $50m at FID, $50m at first oil • $700m in deferred consideration to fund Tul
Slide 21: Portfolio with significant future production potential
Overview presentation Portfolio with significant future production potential TEN Project delivery Industry leading project execution, first oil on 18 August 2016 Significant resource upside, low cost incremental Ghana upside options investment options across Jubilee and TEN Jubilee Turret project Ex
Slide 22: Overview presentation
Overview presentation OVERVIEW PRESENTATION
Slide 23: Exploring in the current environment
Overview presentation Exploring in the current environment Strategy steadily evolves • Exploration continues to be central to Tullow’s value growth strategy • Strong portfolio & attractive programmes adapted for current environment & long- term upside Focus on material low-cost oil plays • Exciting
Slide 24: Guyana-Suriname: excellent position in new oil province
Overview presentation Guyana-Suriname: excellent position in new oil province • Liza-1 deepwater oil discovery significantly de-risks the basin & Tullow’s regional acreage • Araku: 500mmbo prospect in four-way closure, good seismic amplitude support • Araku estimated well cost of c.$14 million net t
Slide 25: Guyana: prospects up-dip of Liza-1 discovery, in shallow water
Overview presentation Guyana: prospects up-dip of Liza-1 discovery, in shallow water Exploration activity commenced • Preparing to acquire 3D seismic • Jubilee-like setting up-dip of Liza oil discovery • Kaieteur estimated well cost of c.$15 million net to Tullow (non-op 30%) • Shallow water concept
Slide 26: Onshore East Africa: exploring regional oil play
Overview presentation Onshore East Africa: exploring regional oil play Location Activity Uganda Lake Albert • 17+ oil fields discovered (90% success) Basin • 1.7 billion barrels of oil discovered Kenya North • Basin margin play unsuccessful at Engomo-1 Turkana Basin • Independent plays away from bas
Slide 27: Kenya: E&A drilling programme in South Lokichar Basin
Overview presentation Kenya: E&A drilling programme in South Lokichar Basin Material proven oil basin • 9 oil accumulations discovered • 750mmbo resource base confirmed by tests Significant upside potential • Billion barrel basin potential • 20 oil prospects & leads yet to drill • Further new plays
Slide 28: Africa: Long-term future upside & portfolio replenishment
Overview presentation Africa: Long-term future upside & portfolio replenishment LAKE MWERU WANTIPA BASIN • Mauritania: exploration shifted to low-cost shelf-edge oil plays • Zambia: extension of East African Rift Basin Play; reconnaissance started • Namibia: material turbidite oil play in low-cost s
Slide 29: Latin America: Significant positions in under-explored region
Overview presentation Latin America: Significant positions in under-explored region • Jamaica: early stage of frontier exploration, interpreting new 2D seismic data • Guyana: attractive acreage up-dip of material Liza-1 oil discovery • Suriname: amplitude-supported low-cost offshore oil plays • Urug
Slide 30: Exploration is central to our growth
Overview presentation Exploration is central to our growth Game-changing opportunities Guyana-Suriname: low-cost, multiple prospect potential Africa: Growth options Oil prone acreage in Namibia, Mauritania and Zambia Kenya: Discovering more oil South Lokichar new E&A campaign started Q4 2016 Ghana:
Slide 31: Overview presentation
Overview presentation OVERVIEW PRESENTATION
Slide 32: Ghana acreage
Overview presentation Ghana acreage Slide 32
Slide 33: Tullow Oil plc
Overview presentation Tullow Oil plc 9 Chiswick Park 566 Chiswick High Road London, W4 5XT United Kingdom Follow Tullow on: Tel: +44 (0)20 3249 9000 Fax: +44 (0)20 3249 8801 Email: [email protected] Web: www.tullowoil.com