Tullow Oil Returns to Profit with $55M Gain in 2024

Tullow Oil Returns to Profit in 2024 on Lower Impairments and Asset Gains

Tullow Oil, the UK-based energy company with a focus on West Africa, reported a return to profitability in 2024, reversing a $110 million loss in the previous year. The turnaround was driven by reduced impairments and gains from asset revaluations.

For the year ending December 31, 2024, the company posted a profit after tax of $55 million. This performance contrasts sharply with 2023, when the firm was forced to devalue reserves at one of its West African oilfields, contributing to a significant loss.

Following the announcement, Tullow's shares rose by 3.9% in early trading. However, despite the recent boost, the stock had declined by 16.9% over the past 12 months as of Monday’s market close.

Interim CEO Richard Miller, who assumed the role in February, expressed optimism about the company’s trajectory. “There is strong momentum within the business with a return to drilling at Jubilee, commencement of production optimisation and reserves maturation activities in Ghana,” he stated.

The Jubilee and TEN oil projects in Ghana remain at the core of Tullow’s operations. The company emphasized that in the coming year, it will concentrate on executing its refinancing strategy, enhancing production efficiency, and expanding reserves at its key sites.

Tullow’s average daily production in 2024 stood at approximately 61.2 thousand barrels of oil equivalent per day (kboepd), slightly down from 62.7 kboepd in 2023.

In a major move to streamline its operations and reduce debt, Tullow announced on Monday that it had agreed to divest its entire working interests in Gabon for $300 million in cash.

The company’s financial challenges saw some relief in January when it was exempted from a $320 million tax obligation related to its operations in Ghana. This development, coupled with ongoing restructuring efforts, has provided breathing room for Tullow as it seeks long-term stability.

Richard Miller, previously Tullow’s Chief Financial Officer, was appointed interim CEO last month following the December departure announcement of former CEO Rahul Dhir.

Analysts at Peel Hunt noted that the 2024 results were largely in line with market expectations. They added that clarity on the company’s leadership, resolution of outstanding tax disputes, and successful bond refinancing could pave the way for greater investor confidence and potential upside in 2025.