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Thursday 13th
March 2008
Tullow Oil has said that last year's lower gas prices in the UK were a
significant factor in its unveiling of a 57% drop in 2007 profits.
Tullow Oil, one of Britain's largest exploration and production companies,
warned yesterday that wholesale gas prices would continue to be high and
volatile, at least in the short term. However, there were plenty of
discoveries to be made in the North Sea if explorers were selective about where
they drilled.
The London-listed company said gas supplies could cost an average 54p a therm
this year, and were being marked up for 2009. Tullow achieved an average of 37p
in 2007.
British Gas and other retail suppliers have used the surge in wholesale
prices to raise household bills, triggering an inquiry by energy regulator
Ofgem.
"New volumes are going to come on stream and we see a more settled supply and
demand picture developing, but the situation at the moment is highly volatile,"
said Tullow's finance director, Tom Hickey.
He said new finds such as the Harrison well in the UK sector of the North Sea
showed that careful drilling could yield results. A 19% fall in prices achieved
on gas sales last year, combined with writing off failed exploration wells and
interest charges, led to a 57% fall in the group's pre-tax profits to £114.2m.
Tullow yesterday shrugged off the decline in profits, describing 2007 as a
"transformational year" thanks to the company's exploration record, including
its largest discovery, the Jubilee field off Ghana.
The final dividend was set at 4.0p, making the total dividend 9% higher at
6.0p.
Sources:
http://www.guardian.co.uk/business/
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