Tullow Oil plc · LSE:TLW
Tullow Oil — Investor Presentation (August 2019)
36 slides from Tullow Oil's investor presentation, August 2019
Slide 1: Tullow Oil plc – Overview Presentation
Tullow Oil plc – Overview Presentation
Slide 2: Disclaimer
Tullow Oil plc – 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 t
Slide 3: Tullow Oil plc – Overview Presentation
Tullow Oil plc – Overview Presentation
Slide 4: Our portfolio of assets
Tullow Oil plc – Overview Presentation OUR PORTFOLIO OF ASSETS NEW VENTURES - exploration EAST AFRICA - development • Extensive acreage in Africa and South America, in Kenya well-known plays • Significant discoveries in South Lokichar basin • Multiple high-impact frontier campaigns planned • Phased
Slide 5: Working responsibly as we grow our business
Tullow Oil plc – Overview Presentation WORKING RESPONSIBLY AS WE GROW OUR BUSINESS The focus of our growth ambitions ENVIRONMENTAL STEWARDSHIP • Avoid, reduce & mitigate GHGs • Deliver positive biodiversity impacts • Independent & robust ESIA best practices RESPONSIBLE OPERATIONS • Drive top quartil
Slide 6: A balanced self-funding E&P company in action
Tullow Oil plc – Overview Presentation A BALANCED SELF-FUNDING E&P COMPANY IN ACTION DELEVERAGE MAXIMISING & PRODUCTION RE-INVEST GROWTH FROM BALANCE DISCOVERED SHEET RESOURCES FREE INVESTING IN CASH OUR BUSINESS CASH FLOW FLOW FROM FINDING OPERATIONS NEW OIL PORTFOLIO & FINANCIAL SHAREHOLDER MANAGE
Slide 7: Summary of 2019 progress and performance
Tullow Oil plc – Overview Presentation SUMMARY OF 2019 PROGRESS AND PERFORMANCE West Africa 89-93,000 Production forecast revised but low-cost production production forecast (bopd) assets continue to provide a solid base Cash flow ~$400m Business set to deliver another year of generation underlying
Slide 8: Tullow Oil plc – Overview Presentation
Tullow Oil plc – Overview Presentation
Slide 9: 2019 half year results summary
Tullow Oil plc – Overview Presentation 2019 HALF YEAR RESULTS SUMMARY Underlying cash Revenue1 Adjusted EBITDAX Profit after tax2 operating costs $872 million $9.0 /boe $1,623 million $103 million 1H 2018: $905 million 1H 2018: $10.9/boe 1H 2018: $1,579 million 1H 2018 : $55 million Capital investme
Slide 10: Relentless focus on retaining cost discipline
Tullow Oil plc – Overview Presentation RELENTLESS FOCUS ON RETAINING COST DISCIPLINE $/bbl $m Unit Opex Net G&A 20 250 200 15 150 10 100 5 50 0 0 2015 2016 2017 2018 2019f 2015 2016 2017 2018 2019f $m Financing costs 400 Competitive industry cost base 300 • Targeting further operational efficiencies
Slide 11: Continued prudent financial management
Tullow Oil plc – Overview Presentation CONTINUED PRUDENT FINANCIAL MANAGEMENT Diversified and evolving capital structure Revenue protection through hedging • A balance of funding sources • Proven hedging policy over 10 years • Revolving RBL provides long-term flexibility • Continue to systematically
Slide 12: Disciplined capital investment in our business
Tullow Oil plc – Overview Presentation DISCIPLINED CAPITAL INVESTMENT IN OUR BUSINESS MAXIMISING GROWTH FROM FINDING PRODUCTION DISCOVERED RESOURCES NEW OIL 1H $140m $33m $40m $16m $35m $248m 2019 Ghana Non-op Kenya Uganda* Exploration 1H 2018: $145m FY $250m $100m $75m $60m $145m $570m 2019 Ghana N
Slide 13: Sustainable free cash flow generation
Tullow Oil plc – Overview Presentation SUSTAINABLE FREE CASH FLOW GENERATION Free cash flow1 $m 700 $225m $423m $570m capex capex capex Factors impacting 2019 free cash flow: 600 Uganda $58/bbl Revised Group production forecast 500 $543m $68/bbl One-off cash inflow from Uganda $65/bbl 400 farm-down
Slide 14: Capital allocation framework
Tullow Oil plc – Overview Presentation CAPITAL ALLOCATION FRAMEWORK DEBT AND LIQUIDITY INVESTING IN OUR BUSINESS SHAREHOLDER RETURNS Balance sheet robust to Apply strict criteria to allocate Sustain financial future oil price volatility capital across the portfolio: discipline and continue business
Slide 15: Tullow Oil plc – Overview Presentation
Tullow Oil plc – Overview Presentation
Slide 16: Solid production base from African assets
Tullow Oil plc – Overview Presentation SOLID PRODUCTION BASE FROM AFRICAN ASSETS Confidence in underlying production business • Assets continue to deliver strong free cash flow • 2019 production impacted by TEN completions • Revised oil production guidance of 89 – 93 kbopd • Long-term production gro
Slide 17: Ghana production operations
Tullow Oil plc – Overview Presentation GHANA PRODUCTION OPERATIONS Significant reserves & resource base • Focus on maximising and sustaining long-term production • Infill drilling programme continues with Maersk Venturer • New wells onstream meeting production expectations • EN-14P suspended; 2H pro
Slide 18: Continued revival of our non-operated portfolio
Tullow Oil plc – Overview Presentation CONTINUED REVIVAL OF OUR NON-OPERATED PORTFOLIO Portfolio provides a platform for growth • Capex of ~$100m per year delivering ~25,000 bopd net production • Gabon exceeding expectations e.g. Simba-1 • Additional growth potential in a region Tullow knows well •
Slide 19: Tullow Oil plc – Overview Presentation
Tullow Oil plc – Overview Presentation
Slide 20: Uganda development – project at an advanced stage
Tullow Oil plc – Overview Presentation UGANDA DEVELOPMENT – PROJECT AT AN ADVANCED STAGE 1.7bbo 230,000 Gross 2C bopd gross resource production PROJECT UPDATE Major technical aspects completed: • FEED studies • Tilenga ESIA approval • Geophysical and Geotechnical studies along entire East Africa Pip
Slide 21: Project Oil Kenya – steps to FID
Tullow Oil plc – Overview Presentation PROJECT OIL KENYA – STEPS TO FID PROJECT UPDATE 560 mmbo 60-80,000 Gross 2C bopd gross Significant progress made in 2019: resource production • EOPS - Trucking 2,000 bopd, first export in Q3, well performance as expected • FEED - Completed for upstream & pipeli
Slide 22: Developing Kenya's discovered resources
Tullow Oil plc – Overview Presentation DEVELOPING KENYA'S DISCOVERED RESOURCES South Lokichar development plan 120 GROSS ANNUAL AVERAGE OIL RATE (KBOPD) • Discovered resources support development via export 100 pipeline to Lamu 80 • Phased development approach planned Incremental • Incremental devel
Slide 23: Tullow Oil plc – Overview Presentation
Tullow Oil plc – Overview Presentation
Slide 24: Exploration criteria for value creation
Tullow Oil plc – Overview Presentation EXPLORATION CRITERIA FOR VALUE CREATION Targeted exploration Conventional light sweet oil COMMERCIAL SCREENING Low cost simple wells Tested at $50/bbl Low complexity operations Low cost of development HIGH MARGIN OIL Value accretive Low socio-environ. impact On
Slide 25: Finding new oil – executing our exploration programme
Tullow Oil plc – Overview Presentation FINDING NEW OIL – EXECUTING OUR EXPLORATION PROGRAMME 2019 2020 2021 GUYANA Currently drilling PERU Forecast 2020 drilling SURINAME CÔTE D’IVOIRE Seismic 2H 2019 COMOROS ARGENTINA New entries Drilling in 1H 2019* NAMIBIA adjacent block Firm Drilling Firm Seismi
Slide 26: Guyana - Jethro is the first success in Tullow's acreage
Tullow Oil plc – Overview Presentation GUYANA - JETHRO IS THE FIRST SUCCESS IN TULLOW’S ACREAGE KANUKU ORINDUIK NON-OPERATED OPERATED 37.50% 5,165 60% 1,776 equity sq km equity sq km >1.5Bbo CRETACEOUS >2.5Bbo TERTIARY gross unrisked target in 2019 gross unrisked discovery & targets in 2019 resource
Slide 27: Jethro-1 well discovery
Tullow Oil plc – Overview Presentation JETHRO-1 WELL DISCOVERY 55m 1,350m 4,400m ~$30m 50 days net pay water depth well depth net well cost drill time JETHRO RESULT Significant oil discovery Excellent sandstone reservoirs Clear seismic definition Results de-risk Tertiary plays Potential upside in Je
Slide 28: Jethro-1 result: de-risking of the Tertiary play
Tullow Oil plc – Overview Presentation JETHRO-1 RESULT: DE-RISKING OF THE TERTIARY PLAY VALIDATION Confirms geological model Verifies seismic interpretation WHAT DOES IT MEAN? Extends industry hotspot Multiple similar prospects de-risked Good development economics Options for development using estab
Slide 29: Next steps for Guyana exploration programme
Tullow Oil plc – Overview Presentation NEXT STEPS FOR GUYANA EXPLORATION PROGRAMME 2019: two more exploration wells to drill 2020: appraisal options for Jethro discovery Joe targeting prospect in Upper Tertiary play >4BBO Gross mean Carapa targeting prospect in Cretaceous play un-risked resources De
Slide 30: Exploration drilling confirmed for 2020 programme
Tullow Oil plc – Overview Presentation EXPLORATION DRILLING CONFIRMED FOR 2020 PROGRAMME Suriname: Trigger well with significant follow on potential MARINA 350m 1H 2020 • Goliathberg-Voltzberg North prospect water depth drilling prospect • Located on flank of Demerara High • Testing dual targets in
Slide 31: Building new acreage across exploration portfolio
Tullow Oil plc – Overview Presentation BUILDING NEW ACREAGE ACROSS EXPLORATION PORTFOLIO Argentina: Successful bid-round • Entry to three offshore blocks in Malvinas West Basin • Shallow water Tertiary and Cretaceous turbidite plays • Geological studies & 2D seismic reprocessing in 2019; 3D seismic
Slide 32: Spotlight on Côte d'Ivoire
Tullow Oil plc – Overview Presentation SPOTLIGHT ON CÔTE D’IVOIRE >1.5 BBO Low-cost Using both Carried work High-value Light footprint Gross mean un-risked exploration in proven & programme; barrels & low execution across resources core West Africa innovative 60% operated breakeven 8,000 sq km oil p
Slide 33: Spotlight on Comoros
Tullow Oil plc – Overview Presentation SPOTLIGHT ON COMOROS ~7 BBO 17 Leads 16,063 sq km 35% equity Large, operated, offshore oil play in East Africa Simple drilling and attractive fiscal terms Managed cost exposure in frontier acreage Flexible options to leverage seismic market Rapid deal-making wi
Slide 34: Tullow Oil plc – Overview Presentation
Tullow Oil plc – Overview Presentation
Slide 35: 2019 data overview
Tullow Oil plc – Overview Presentation 2019 DATA OVERVIEW Group average working interest production - 2019 forecast Operating data 2019 FY 2019 Forecast forecast OIL PRODUCTION (bopd) OPERATING COSTS 1 ($/boe) Ghana 64,000 Equatorial Guinea 15 Jubilee 34,000 Côte d’lvoire 17 TEN 30,000 Gabon 2 28 Gh
Slide 36: Tullow Oil plc
Tullow Oil plc – Overview Presentation Tullow Oil plc 9 Chiswick Park 566 Chiswick High Road London, W4 5XT Follow Tullow on: United Kingdom Tel: +44 (0)20 3249 9000 Fax: +44 (0)20 3249 8801 Email: [email protected] Web: www.tullowoil.com Slide 36