West Africa-focused Tullow Oil has reported a narrowing of losses for 2021 as its revenues for the year dropped.
Tullow Oil said its loss after tax fell to $81m from a loss after tax of $1.222 billion in 2020 due to exploration costs being written off, impairments, restructuring costs and other provisions.
Its revenues for the year fell to $1.273 billion from $1.396 billion.
The company also reported a 2021 free cash flow of $245m, about 45% down from the previous year and broadly in line with guidance of $250m.
The firm reiterated its free cash flow would reach $100 million at an oil price of $75 a barrel, while it plans to spend $350 million, mostly in Ghana, forecasting overall output of 55,000 to 61,000 barrels of oil equivalent a day.
Oil prices have soared in recent months, with current benchmark contracts at around $130 a barrel, but Tullow hedges most of its output with price floors and ceilings to shield against price volatility.
In 2021 it lost out on $153m in revenue due to hedges.
The company had a market capitalisation of around $1.2 billion as of Tuesday and net debt of $2.1 billion.
It hedged 42,500 bpd of its 2022 output at an average floor of $51 a barrel and ceiling of $78 a barrel and around 33,100 bpd of next year's output at $55 and $75 a barrel, with smaller production volumes hedged into 2024.
Tullow's 2020 cashflow was boosted by the $500m sale of its stake in Ugandan onshore oilfields to TotalEnergies.
Rahul Dhir, Tullow Oil's chief executive, said that after a transformational 2021, in which Tullow successfully refinanced its balance sheet, drilled highly productive wells in Ghana and demonstrated operational excellence and financial discipline across the Group, it is now concentrating on the successful delivery of its long-term business plan.
"This year will see a great deal of activity at our flagship Jubilee field with investment in new infrastructure and new wells to grow production in the near term and we are taking on the operation and maintenance of the FPSO," he said.
"At TEN, we will drill two important, strategic wells that will help define our future plans for the fields and we will continue to build production in Gabon," the CEO said.
"I also expect us to make tangible progress towards our ambitious target of achieving Net Zero by 2030. With additional opportunities to deliver value across our portfolio, including gas commercialisation in Ghana, our revised Kenya development project and an exciting well in a proven play in Guyana, we are well-placed to deliver value from our assets and to grow our business," he added.
