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Tullow Oil PLC on Wednesday reported a jump in interim profit and stated that it remains committed to its all-share merger with peer Capricorn Energy PLC.
In the six months to June 30, the West Africa-focused oil and gas producer posted a pretax profit of $548 million, more than doubled from $213 million a year before.
This was on revenue of $846 million, up 16% versus $727 million, Tullow Oil reported.
It said its financial performance was driven by a solid performance from its West African portfolio.
Working interest production during the period averaged 60,856 barrels of oil equivalent per day, in line with expectations and down 0.6% from 61,230 a year ago.
The FTSE 250 listing declared no interim dividend, unchanged from a year before. It hasn't made a payout since 2019's 2.35 cents-per-share interim.
Tullow said that its drilling programme in Ghana is ahead of schedule. It plans to drill and complete a further six wells by year-end.
Looking ahead, it guided for a full year underlying operating cashflow of roughly $950 million. Further, Tullow forecast a full-year free cash flow of around $200 million.
In relation to its merger with fellow London listing Capricorn Energy, the company said that it expects to host a capital markets day for investors and issue a circular and prospectus in connection with the recommended merger in the fourth quarter, ahead of a shareholder vote. It expects the completion of the transaction before the end of the year.
In June, the companies agreed on the terms of the deal.
Under the agreement terms, Capricorn shareholders will receive 3.8068 new Tullow shares for each Tullow share, giving Capricorn shareholders 47% of the enlarged firm.
‘The board of Tullow remains fully committed to the merger with Capricorn which continues to be recommended by both the Tullow and Capricorn boards on the current terms. We firmly believe that the proposed merger has the potential for material value creation by implementing a combined business plan which accelerates investment in key projects and delivers very significant synergies,’ Chief Executive Rahul Dhir said.
Tullow Oil shares were trading 2.5% lower at 48.45 pence on Wednesday morning in London.
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