Tullow Oil Profit Climbs to Record on Oil, Gas Prices

By Eduard Gismatullin

Aug. 27 (Bloomberg) -- Tullow Oil Plc, the U.K. explorer with the most licenses in Africa, said first-half profit rose to a record as crude oil and natural-gas prices advanced.

Net income climbed to 124 million pounds ($229 million), or 16.98 pence a share, from 37 million pounds, or 5.03 pence, a year earlier, the London-based company said today in a statement. Sales gained 33 percent to 378 million pounds.

Tullow forecasts record-high earnings and production for the full year, Chief Financial Officer Tom Hickey said in a telephone interview. The company expects a ``significant revision'' of its oil and gas resources by the end of the year following exploration successes in Uganda and Ghana, Chief Operating Officer Paul McDade also said by phone.

Crude oil traded in New York exceeded $100 a barrel for the first time in January and jumped 46 percent in the first six months of the year. Gas prices were about 36 percent higher in the period. Tullow increased oil and gas extraction by 1 percent to 70,600 barrels of oil equivalent a day in the first half.

Tullow rose as much as 2.1 percent to 810 pence in London trading, which would be the highest close in six weeks. The stock was at 805 pence as of 8:19 a.m. local time.

The company plans to pump 68,000 to 70,000 barrels a day this year, down from a July forecast of 70,000 to 72,000 barrels a day. Tullow revised its target because of delays to gas projects in the U.K., McDade said.

Jubilee Field

Tullow will invest at least $3.1 billion in the first phase of its Jubilee field development in Ghana, with the first crude production expected in the second half of 2010, McDade said. The deposit, which will initially pump 120,000 barrels of oil a day, may later double output to about 250,000 barrels a day.

The company has contracted Modec Inc., the world's second- biggest builder of floating oil-production platforms and storage facilities, to supply infrastructure for the Jubilee field. The development of the deposit will be approved by Ghana's government ``within months,'' McDade said.

Over the next two years, Tullow plans to expand development of its fields in the U.K., where gas sales have become ``very profitable,'' Hickey said.

Hickey will step down as CFO Sept. 1 and will be replaced by Ian Springett, Tullow said today in a separate e-mailed statement.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net