Africa-focused oil and gas explorer Tullow Oil has reported a $2 billion pre-tax loss, its first in 15 years, and became one of the only companies in the sector to sacrifice its dividend to deal with a sharp decline in oil prices.
The London-listed FTSE 100 company will also cut costs by $500 million over the coming three years, half of which is expected to come from CAPEX, while the remainder will include job cuts, Tullow said.
Oil companies across the globe have been hit by a 50 percent drop in crude prices in eight months, putting them under pressure to slim down their businesses.
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Yet major oil producers including Statoil STL.OL, BP , Chevron and ExxonMobil have made a point of continuing to reward shareholders, making Tullow an exception in the industry by scrapping its final 2014 payout.
Tullow had already announced a $200 million reduction in 2015 CAPEX last month. Analysts at Morgan Stanley said they expected Tullow to cut CAPEX by another $200 million by the end of the year.
The oil producer’s full-year sales revenue fell 16 percent to $2.2 billion, while write-offs of $2.3 billion, announced last month, resulted in a full-year pretax loss of $2.05 billion.
