Tullow Oil has reported a €306m ($415m) pre-tax write-off in net exploration in the first half of 2014 after disappointing results in Mauritania, Ethiopia and Norway.
The oil and gas producer attributed the loss to recent disappointing results in basins in Mauritania, Ethiopia and Norway. Tullow is now focusing on drilling in new exploration sites in Kenya and Ethiopia this and next year and continuing steady production from its flagship Jubilee oil field in Ghana.
“With potential basin-opening wells across the portfolio coming up in the second half of the year and strong revenue and cash flow, Tullow is in a strong position for the remainder of this year and into 2015,” said Chief Executive Aidan Heavey. He also said its asset disposal programme was making steady progress, with further deals expected to divest its remaining UK and Dutch North Sea portfolio.
Despite this optimism, the company’s shares slipped 5p to 850p the following week, while analysts at Oriel Securities said, “Given that the company had its capital markets day recently, there was not much new on the operational front. Overall however we see the update slightly on the negative side, largely due to production being below the full year 2014 guidance range, suggesting to us that the full year production is likely to be towards the low end of guidance.”