Tullow Oil announced its full-year results for 2018, with the first annual net profits since 2018. Credit: Tullow Oil.

UK-headquartered independent oil and gas exploration and production group Tullow Oil has announced its full-year results for 2018, reporting $1.6bn of sales revenue and the first annual net profits since 2015.

Tullow reported a gross full-year profit of $1.1bn in 2018, which amounts to $85m after tax against a $175m loss in 2017.

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This profit has allowed Tullow to start a clear capital returns policy for its shareholders, starting with 2018’s final dividend. It is expected that this dividend will be no less than $100m and will be paid biannually.

The company’s year-end net debt amounted to $3.1bn, with $1bn headroom, a decrease of 11.8% from $3.5bn in 2017.

Tullow cited its operations in West Africa as contributing factors toward these profits. The company’s 2018 net oil production in West Africa averaged 88,200 barrels of oil per day (bopd), with 9,300-101,000bopd forecast for 2019.

Tullow CEO Paul McDade said: “Tullow has worked hard over the past few years to become a self-funding, cash-generating business with a robust balance sheet, low-cost assets and a rigorous focus on cost and capital discipline.

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“This has allowed us to set a clear capital returns policy which will start with the 2018 final dividend announced today. Our high-margin producing assets in West Africa, substantial development assets in East Africa and exploration licences in industry hotspots provide Tullow with a strong foundation for growth in the years ahead.”

Tullow plans to commence exploration drilling in Guyana, with a three-well programme planned in 2019.

The company also plans to consolidate its presence in Africa through its developments and exploration licences in East Africa. Two final investment decisions are expected for projects in Uganda and Kenya, with the potential to deliver over 50,000bopd of net production to Tullow by the early 2020s.