This is the third consecutive year that the exploration company has reported a loss. According to its results for the year ended 31 December 2016, the company recorded a full-year operating loss of USD 755 million (2.7 trillion Shillings) for 2016.
This was down from a loss of USD 1.09 million (3.8 billion Shillings) posted in 2015.
The results indicate that the company had written off USD 723 million (2.5 trillion Shillings) of exploration expenses and ended the year with a net debt of USD 4.8 billion (16.9 trillion Shillings). The company’s revenue dropped by 21 percent in 2016 to USD 1.2 billion (4.3 trillion Shillings).
Aidan Heavey, the Group’s Chief Executive in a statement said the group has made excellent progress with its East African developments and are building a high quality exploration portfolio to grow the business.
He said the major highlight in 2016 was delivering Ghana’s second major oil and gas development, the TEN fields, on time and on budget.
Heavey who is soon handing over the position of Chief executive said production from TEN, alongside other West African oil production, has provided Tullow with free cash flow and enabled it to begin the important process of deleveraging our balance sheet.
Early in January this year Tullow announced that it was to farm down part of its stake to Total at USD 900 million (3.3 trillion Shillings) and downgraded its production outlook for 2017. Upon completion, the farm-down will leave Tullow with an 11.76 percent interest in the upstream and pipeline projects.
This is expected to reduce to a 10 percent interest in the upstream project when the Government of Uganda formally exercises its right to back-in.
Completion of the transaction is subject to certain conditions, including the approval of the Government of Uganda, after which Tullow will cease to be an operator in Uganda. The disposal is expected to complete in 2017.
There is speculation that Tullow may divest more of its projects in Kenya so as to cover about USD 5 billion (18 trillion Shillings) debt.
Tullow Oil announced a new oil discovery in Kenya, with the Erut-1 well in onshore Block 13T finding oil at the northern limit of the South Lockichar basin. It said there was good progress on a standalone development in Kenya with an export pipeline to Lamu.
It said life-of-field development costs (comprising operating expenditure, capital expenditure and potential pipeline tariffs) are expected to be in the region of USD 25 (89,000 Shillings) to USD 30 (106,000 Shillings) per barrel.
Preparations for the upstream development Front End Engineering Design (FEED) are under way, with FEED expected to commence in the second half of 2017.