Tullow Oil reports higher profit for first half of 2024

 West Africa-focused Tullow Oil, opens new tab posted a rise in profit for the first six months of 2024, helped by higher crude prices.

Crude prices have edged higher in the first six months of the year, getting a boost from an OPEC+ production cut extension, supply worries from escalating tensions in the Middle East and expectations of interest rate cuts from the U.S. Federal Reserve.

Tullow said its realised oil price after hedging for the reported period was US$77.7 per barrel, higher than US$73.3 per barrel last year.

“We now progress into a period of lower capex in the second half of the year and beyond,” said Rahul Dhir, CEO at Tullow.

“We will continue to reduce debt through sustainable free cash flow generation,” he said.

The company expects to reach net debt of less than $1 billion in 2024.

Total production for the first-half of the year rose marginally to 63.7 thousand barrels of oil equivalent per day (kboepd), from last year’s about 62 kboepd.

The London-listed oil and gas producer reiterated its full-year production outlook but expected it to be at lower end of the 62 to 68 kboepd range.

“While production rose in the period, it has not grown as must as expected due to poor performance at Jubilee (field) with new wells underperforming and Jubilee Southeast ramp-up slower than anticipate,” said Panmure Liberum analyst Ashley Kelty.

While Peel Hunt analysts said the company had released a solid set of interim results.

Tullow shares were up 0.9% at 27.68p.

The company posted a profit of US$196 million for the six months ended 30 June, higher than the US$70 million it posted last year.