Operational highlights
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Production averaged 57.6 kboepd (2014: 63.6 kboepd), exceeding our market guidance despite disposals of non-core assets |
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Proposed acquisition of E.ON's UK assets: strongly value accretive, adds c.15 kboepd of 2016 net production and captures a valuable hedging programme; good progress on approvals with the lending group |
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Solan first oil is expected shortly; plans for second oil and ramp up to full production progressing in line with previous guidance |
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The Catcher project is under budget and BW Offshore, our FPSO provider, maintain a delivery schedule for first oil in 2017; ongoing development drilling results are encouraging |
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Sea Lion Phase 1 project scope modified with lower break-even oil price; new contractual arrangements agreed with Sea Lion partner, and FEED contracts now in place; significant exploration successes at Zebedee and Isobel Deep |
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Continued portfolio rationalization with the sale of the Norwegian business for US$120 million; Pakistan sales process ongoing |
Financial highlights
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Strong cash flows from operations of US$809.5 million (2014: US$924.3 million) |
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Revenue of US$1.1 billion (2014: US$1.6 billion); loss after tax of US$1.1 billion (2014: US$210.3 million), reflecting non-cash post-tax impairments of US$583.5 million, due to lower near-term oil price assumptions, principally relating to the Solan field |
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Cost reductions of over 25 per cent delivered for 2015 in operating costs and G&A spend; further actions planned in 2016 to lower cost base |
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Significant reduction in capex spend for 2016, with further reductions in annual spend forecast in 2017 |
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2016 production guidance of 65-70 kboepd, including a contribution from E.ON |
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Approximately 30 per cent of 2016 oil production hedged at US$73.4/barrel upon completion of the proposed acquisition of the E.ON UK assets |
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Significant liquidity with cash and undrawn bank facilities of US$1.2 billion; unsecured facilities not subject to semi-annual redetermination; E.ON acquisition will be materially covenant accretive; further relaxation of covenants may be required if low oil prices persist |
