Tullow Oil PLC on Wednesday said a reduction in oil prices led to a drop in its annual profit and revenue, though it still enjoyed a slight rise in full year production.

The London-based oil and gas explorer said pretax profit plunged by 78% to $95.9 million from $442.1 million the year before.

Revenue dropped 8.4% to $1.63 billion, from $1.78 billion in 2022. This was driven by post-hedge oil prices dropping by 12% to $77.5 per barrel from $88.0 a year ago.

Tullow’s full-year working interest production rose 2.6% to 62,700 barrels of oil per day, compared to 61,100 in 2022.

Tullow said it swung to a loss per share of 7.6 US cents from earnings per share of 3.4 cents a year ago.

Looking ahead, it now expects production growth in 2024, with group working interest production expected to average between 62,000 to 68,000 barrels of oil per day.

The firm added that it is on track to deliver its targeted $800 million free cash flow over the 2023 to 2025 period, with over $600 million free cash flow expected to be generated over 2024 to 2025 at $80 per barrel.

Commenting on Tullow’s full-year results, Chief Executive Officer Rahul Dhir said: ‘In line with our strategy, we are continuing to focus relentlessly on operational excellence, capital efficiency and investments to drive growth. This strategy is delivering material cashflow generation, and we are on track to deliver our target of [around] $800 million free cash flow over the 2023 to 2025 period and optimise our capital structure.

‘Tullow has a strong and unique foundation to create material value for our investors, host nations and stakeholders, and we look to the future with confidence,’ he added.

Shares in Tullow Oil were down 3.4% at 27.31 pence each in London on Wednesday morning.

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