Tullow reports 1H 2014 loss

Tulloq today reported its first half 2014 sales revenue decreased 6% to $1.26 billion (1H 2013: $1.35 billion) principally as a result of a 7% decrease in sales volumes primarily relating to the 2013 disposal of Tullow Bangladesh and certain Gabon assets for which Tullow did not receive any sales volumes in 2014.

However, in 1H 2014 a loss was recognised from continuing activities before tax of $29 million (1H 2013: $486 million, profit) primarily as a result of one-off items in the first half of 2014 and a significant increase in exploration costs written off, Tullow explains.

Tullow said that the main factors explaining the movements between 1H 2014 and 1H 2013 were:

· A decrease in 1H 2014 sales revenue of $82 million, primarily due to lower volumes, partially offset by a related $43 million decrease in cash operating costs;
· A $115 million loss on Uganda farm-down in 1H 2014 in relation to the partial impairment of contingent consideration and a one-off payment in relation to licence extensions; and
· An increase in 1H 2014 exploration write-offs of $226 million.

In 1H 2014 a loss for the period from continuing activities after tax was recorded of $95 million (1H 2013: $313 million, profit). Basic earnings per share decreased 126% to a loss of 8.3 cents (1H 2013: profit 32.2 cents).

Aidan Heavey, Tullow CEO said: “In the first half of 2014, Tullow made further important discoveries in Kenya and Norway and we have a concentrated exploration campaign planned for the next 18 months. We have also made good progress with the TEN project in Ghana, with our discussions with host governments on our developments in East Africa and with our financing. With strong revenues and cash-flow from our existing production and a well funded and diverse balance sheet, Tullow is well placed for the remainder of this year and into 2015.”