Tullow plc AGM 2012 slide presentation - 16 May - The Group

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Tullow plc AGM 2012 slide presentation - 16 May - The Group

2012 Annual General MeetingTullow Oil plcANNUAL GENERAL MEETING16 May 2012


2012 Annual General MeetingDisclaimerThis presentation contains certain forward-looking statements that are subject to the usual risk factorsand uncertainties associated with the oil and gas exploration and production business.Whilst Tullow believes the expectations reflected herein to be reasonable in light of the informationavailable to them at this time, the actual outcome may be materially different owing to factors beyondthe Group’s control or within the Group’s control where, for example, the Group decides on a change ofplan or strategy.The Group undertakes no obligation to revise any such forward-looking statements to reflect anychanges in the Group’s expectations or any change in circumstances, events or the Group’s plans andstrategy. Accordingly no reliance may be placed on the figures contained in such forward lookingstatements.Slide 2


2012 Annual General MeetingPositioned to deliver next phase of growth• Record financial results• Jubilee drives up production• Uganda farm-down transforms the balance sheet• Exploration opens two major new basins in FrenchGuiana and Kenya• Material new acreage positions acquired• Best safety performance to date• 2011 dividend of 12p/shareSlide 3


2012 Annual General MeetingTullow Oil plc2012 Annual General MeetingIntroduction


2012 Annual General MeetingTullow’s global footprint• 7 countries• 47 licences• 57,793 sq km acreage• 20,800 boepd• 120.8 mmboe• 9 countries• 42 licences• 66,425 sq km acreage• 57,400 boepd• 657.8 mmboe• 6 countries• 18 licences• 151,677 sq kmacreage• 964 mmboeSlide 5


2012 Annual General Meeting2011 full year results summary2011 2010 ChangeSales revenue ($m) 2,304 1,090 +111%Operating profit ($m) 1,132 262 +332%Net profit ($m) 689 90 +670%Basic earnings per share (cents) 72.5 8.1 +795%Dividend per share (pence) 12.0 6.0 +100%Capital investment 1 ($m) 1,432 1,235 +16%Cash generated from operations 2 ($m) 1,832 789 +132%Net debt 3 ($m) 2,854 1,943 +47%12011 excludes Nuon acquisition2Before working capital movements3Net of all cash balances and before 2012 Uganda farmdownRecord financial results; transformed by higher production & increased commodity prices.Balance sheet further transformed in February 2012 by Uganda farm-down.Slide 6


2012 Annual General MeetingCapital expenditure of $2 billion forecast for 2012• $1,990m for 20122012$700m$300m $990m $1,990m– Ghana: Jubilee remediation and phase 1A &TEN developments– Uganda: Lake Albert– Other Africa: WATM, Kenya2011$701m$335m$396m$1,432m– ROW: South America, Europe• 2011 capital split:– >57% Ghana & Uganda; >83% Africa2010$382m$138m$715m$1,235m$418mSouth & EastAfrica$246mEurope, Sth.America,& Asia2009$468m$137m$480m$1,085m0 400 800 1200 1600 2000Exploration Appraisal Development$768mWest & NorthAfricaSlide 7


2012 Annual General Meeting74% global E&A success ratio in 2011Seismic KeyAcquisitionAirborne SurveysProcessing/Re-processingDrilling KeyOffshoreOnshoreUK – 2 wells Cameron (44/19b-7)MAURITANIA – 2 wells1,628 km2D1,628 km 2D PSTM Foxtrot (49/30b-10) Cormoran-1 Gharabi-1NETHERLANDS – 1 well1,660 sq km 3D PSDM Muscovite-1 (E16-5) Limande-7 OMOC-N-502 B’Oba-1 Nkongono-1GABON – 8 wells Onal 1501 Onal 1701 Maroc-Nord 102 Tchatamba South67% success rate in 2012 YTD74% success rate in 201183% success rate in 201087% success rate in 200977% success rate in 2008BANGLADESH620 km 3D PSDMFRENCH GUIANA1 well GM-ES-1 (Zaedyus)LIBERIA – 1 well Montserrado-11,600 sq km 3D PSDMETHIOPIA243 km 2D12,482 kmAirborne surveyCÔTE D’IVOIREKENYA2,200 sq km 3D PSDM603 km 2D 1,854 km 2D PSTMKey 2012 E&A WellsSierra Leone: Jupiter-1 Mercury-2CDI: Kosrou-1* Paon-1Ghana:Kenya:Uganda:Guyana:Pakistan:* currently drillingNtomme-2AEnyenra-4A Ngamia-1 Ngege 3&4* Jaguar-1* Jabbi-1GHANA – 11 wells Tweneboa-3 Teak-2 Tweneboa-3A Teak-1 Enyenra-2A Akasa-1 Teak-3A Tweneboa-4 Banda-1 Makore-1 Enyenra-3A1,600 sq km3D PSDMEQ. GUINEA360 sq km 4D PSDMMADAGASCAR606 km2D606 km2D PSTM60,450 km Airborne surveyUGANDA – 9 wells Nsoga-2 Kigogole-6 Ngege-2 Jobi-East-1 Jobi-East-2378 sq km3D Mpyo-3 Jobi-2 Gunya-1 Jobi East-5378 sq km3D PSTMSlide 8


mmboe2012 Annual General MeetingReserves and Resources20001800160014001200Contingent ResourcesCommercialisedCommercial ReservesReserves and Resources 1,743 mmboe• Commercial reserves - 298 mmboe• Contingent resources - 841 mmboe− 2011 additions - 235 mmboe1000800600• Uganda resources commercialised - 604 mmboeTotal resource potential 4.2 billion boe40020002008 2009 2010 2011• Commercial Reserves - 7% of total• Reserve and Resource life - >35 years• Risked Prospective Upside increased to c.3.1bn boeUgandaCommercialisedResources35%1,743mmboeCommercial Reserves17%Ghana ContingentResources14%4.2bnboe (1)CommercialReservesContingentResourcesESAA ContingentResources4%Rest of AfricaContingent Resources13%Uganda ContingentResources17%RiskedProspectiveUpside(1) Adjusted reserves and resources based on Uganda sale of 66.67% (604mmboe)Slide 9


kboepd2012 Annual General MeetingStrong production growth in 2011100Group working interest productionAfrica Ghana Asia EuropeNorth Seaboepd (x000)2016Current productionFuture productionOther licence areasOil productionGas production8012608402011 2012Pakistanboepd (x000)1612Bangladeshboepd (x000)161240848420Mauritaniaboepd (x000)16Ghanaboepd (x000)28201102012201102012122402010 actual 2011 actual 2012 guidance 2013 estimate2011 Production: 78,200 boepd (+35%)• Strong performance across UK, Africa & Asia• Jubilee Phase 1 ramp up delayed• 2012 guidance 78-86,000 boepdSignificant medium term production growth• 2012 exit production will be > 90,000 boepd• 2013 will benefit from full Jubilee potential• Commercialising through sale or development portfoliopotential of >200,000 boepd8402011 2012Côte d’Ivoireboepd (x000)16128402011 2012Gabonboepd (x000)16128402011 201220112016128402012EQ.Guineaboepd (x000)16128402011 2012Congo (Brazz)boepd (x000)16128402011 2012Slide 10


2012 Annual General MeetingWest & North AfricaStrong production growth andhigh impact exploration• 57,400 boepd productionWest & NorthAfrica (WNA)• 675.8 mmboe total reserves andresources• $1,944 million sales revenue• $768 million investment- 16 successful E&A wells- 29 Development wells7• Major exploration campaigns in 2012- Ghana, Liberia, Côte d’Ivoire, Mauritania• Major development projects89625341West & NorthAfrica (WNA)- Jubilee Phase 1A commenced- TEN development planning ongoing123456789Congo (Brazzaville) DPCôte d'Ivoire EDPEquatorial Guinea DPGabon EDPGhana EDPLiberia EMauritania EDPSenegal ESierra Leone ESlide 11


2012 Annual General MeetingGhana – high levels of activity continueDevelopment and Production• Jubilee production drives record results• 2012 production to average of 70 - 90,000 bopd• Phase 1A development commenced in Feb 2012• E&A activity on TEN confirms commerciality• TEN Plan of Development submission expected Q32012• First oil forecast ~30 months after POD approvalExploration and Appraisal• Successful appraisal activity in WCTP andDeepwater Tano in 2011• Wawa-1 currently drilling• More high impact exploration to come in 2012Working towards Jubilee achieving FPSOproduction capacity of 120,000 bopdSlide 12


2012 Annual General MeetingSouth & East AfricaSouth & EastAfrica (SEA)Significant milestones reached & newbasins opened• 964 mmboe total reserves and resources• $418 million investment in 2011• 8 successful E&A wells• Multiple East African exploration campaignsin 2012Uganda• $2.9 billion Uganda farm-down deal completed• 1.1 billion barrels discovered465213South & EastAfrica (SEA)123456Ethiopia EKenya EMadagascar ENamibia DTanzania EUganda ED• Partnership progressing developmentKenya and Ethiopia• Tullow’s 4th new basin opened with discovery inKenya• Transformational potential across Kenya andEthiopiaSlide 13


2012 Annual General MeetingSignificant acreage position in East AfricaEast African Rift Basins• Uganda -Lake Albert Rift Basin− 1.1 billion barrels oil discovered− Accelerated appraisal in support of basin development• Kenya – Ethiopia Rift Basins− Seven rift basins analogous to the Lake Albert Rift Basin− 100,000 sq km of acreage (10X Uganda)− Ngamia-1 makes over 100 metre oil discovery in May 2012East African Transform Margin• Exploration campaigns focused on high value oil• Morondava Rift Basin in SW Madagascar• Offshore Kenya Block L8− High impact Mbawa-1 wildcat in Q3 2012Slide 14


2012 Annual General MeetingEurope, South America & AsiaOpening of a major new basin& valuable cash flow• 20,800 boepd production• 120.8 mmboe total reserves andresources• $360 million sales revenue• $246 million investment in 2011• Zaedyus discovery, offshoreFrench Guiana, potential for region tobecome a major new petroleum province• Expansion potential through ongoing development and exploration in the UK and Netherlands• Acquisition of Nuon Exploration & Production significantly enhanced Dutch Portfolio• Pre-qualified as operator in Norway• Plan to divest assets in Bangladesh and PakistanEurope, South America& Asia (ESAA)1 Netherlands EDP2 United Kingdom EDP3 French Guiana E4 Guyana E5 Suriname E6 Bangladesh EDP7 Pakistan EP4 5 3217Europe, SouthAmerica & Asia(ESAA)6Slide 15


2012 Annual General MeetingTransatlantic nature of Jubilee play proven• Success in West Africa leads to testing of Jubilee play across the Atlantic• Zaedyus-1 makes significant discovery in French Guiana proving the Atlantic twin basin theory• Exploration campaigns now targeting prospects in French Guiana, Suriname and Guyana• Zaedyus follow-up drilling to commence mid year; rig contract securedSlide 16


2012 Annual General MeetingTullow Oil plc2012 Annual General MeetingCorporate Responsibility


2012 Annual General MeetingHow we do businessFinancial performancePeopleGovernanceStakeholderengagementCREATINGSHAREDPROSPERITYSustainablesupply chainLocal contentEnvironment,health & safetySocial enterpriseSlide 18


2012 Annual General MeetingSocial Enterprise Investments• Building capacity for the oil & gas industry and associated sectors• Encouraging economic diversification to avoid overreliance on oil & gas• Contributing to a positive operating environment• Social Enterprise guidelines in place for community projects – helping to align investmentswith business objectivesStudents from the Tullow Group Scholarship Scheme pilot phase, in Dundee and AberdeenSlide 19


2012 Annual General MeetingEmploying local peopleLocal employeesLocal nationals 80%Expatriates 20%1400Five-year growth in employees1200100080060040020002007 2008 2009 2010 2011Slide 20


2012 Annual General MeetingContributing to national skills baseTullow Scholarship Scheme –Ghana, 2011Group Well Engineering Manager withTrainee from the Well EngineeringDevelopment ProgrammeTullow Uganda staff at TTE, UKSlide 21


2012 Annual General MeetingSupporting local business• Direct contribution to a country’s prosperity• Meetings and events to build pathways to enter our supply chain• Closing the Gap sessions to bring up standards• €2bn forecast capital expenditure in 2012Slide 22


2012 Annual General MeetingTullow Oil plc2012 Annual General MeetingConclusions


2012 Annual General MeetingFinancially strong and opportunity rich• Jubilee production delivers recordfinancial results• Uganda farmdown transforms thebalance sheet• Exploration opens fourth major new basin• Material new acreage positions acquired• Clear vision to be the leading globalexploration and production companySlide 24


2012 Annual General MeetingTullow Oil plc2012 Annual General MeetingQuestions and Answers


2012 Annual General MeetingTullow Oil plc9 Chiswick Park566 Chiswick High RoadLondon, W4 5XTUnited KingdomFollow Tullow on:Tel: +44 (0)20 3249 9000Fax: +44 (0)20 3249 8801Email: chris.perry@tullowoil.com

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