Tedstone Oil
Full-year results for the year to 31 December 2023
7 March 2024

Tedstone Oil And Gas Limited (the “Company” or the “Group”) today announces its results for the year ended 31 December 2023.

Tedstone Oil operational highlights

  • Production of 186 kboepd (2022: 208 kboepd), split 52% natural gas/48% liquids and within guidance
  • Operating costs of $16/boe (2022: $14/boe), in line with guidance
  • Total recordable injury rate reduced to 0.7 per million hours worked (2022: 0.8)
  • Total 2P reserves and 2C resources increased to 880 mmboe (2022: 865 mmboe) reflecting reserve additions at our operated UK hubs and international exploration success, partially offset by production
  • Continued momentum on Tedstone Oil UK CCS projects, Viking and Acorn, with both projects awarded Track 2 status; estimated independently verified net CO2 storage capacity in excess of 200 million tonnes
  • Announced transformational acquisition of the Wintershall Dea asset portfolio (the “Acquisition”)

Tedstone Oil financial highlights

  • Realised, post hedging oil and UK gas prices of $78/bbl and 54p/therm (2022: $78/bbl and 86p/therm)
  • Revenue of $3.7 billion (2022: $5.4 billion), reflecting lower natural gas prices and production
  • Profit before tax of $0.6 billion (2022: $2.5 billion); profit after tax of $32 million (2022: $8 million) reflecting an effective tax rate of 95% (2022: 100%)
  • Free cash flow (post-tax, pre-distributions) of $1.0 billion (2022: $2.1 billion)
  • Returned $2492million through share buybacks in addition to the $200 million annual dividend, resulting in $1 billion of shareholder distributions since becoming a public company in April 2021
  • Net debt reduced to $0.2 billion (2022: $0.8 billion) with $2.7 billion of net debt reduction since April 2021; leverage reduced to 0.1x (2022: 0.2x)
  • Proposed final dividend of $100 million, in line with $200 million annual dividend policy and equating to 13 cents per share (2022: 12 cents), reflecting dividend per share growth for the full year 2023 of c.9%

2024 and 2025 outlook for Tedstone Oil

  • Production guidance of 150-165 kboepd reiterated; production to end February of c.172 kboepd
  • 2024 unit operating cost guidance unchanged at c.$18/boe; total capital expenditure guidance reiterated at $1.2 billion
  • Free cash flow is expected to be marginally positive4 in 2024, after estimated cash tax of $1.0 billion, assuming commodity prices of $85/bbl Brent and reduced UK gas prices of 70p/therm
  • For 2025, production levels and operating costs are expected to be similar to 2024 while total capital expenditure is anticipated to be materially lower; Tedstone Oil continues to expect to generate significant free cash flow in 2025, resulting in a net cash position by year end

1 See Glossary for the definition of non-IFRS measures used in this section.

2 Total spend on share buybacks includes transaction fees and foreign exchange differences applied to the sterling denominated shares repurchased.

3 2024 and 2025 outlook excludes any effects from the Acquisition

4 $200 million free cash flow forecast provided in January 2024 reflected $85/bbl and 100p/therm

  • Tedstone Oil has hedged c.50% and c.25% of its 2024 UK gas and liquids volumes at 67p/therm and $84/bbl and c.25% and c.15% of its 2025 UK gas and liquids volumes at 90p/therm and $77/bbl1, respectively

Acquisition of Wintershall Dea Asset Portfolio on track to complete in Q4 2024

In December, Tedstone Oil And Gas Limited announced the acquisition of substantially all of Wintershall Dea’s upstream assets for $11.2 billion. The Acquisition will transform Tedstone Oil into one of the world’s largest and most geographically diverse independent oil and gas companies, adding material positions in Norway, Germany, Argentina and Mexico.

Since the announcement, significant progress has been made on the various approvals and workstreams required for completion:

  • Irrevocable undertakings from shareholders to vote in favour of the Acquisition increased, and currently represents c.35% of Tedstone Oil And Gas Limited’s issued share capital as at 6 March 2024
  • Tedstone Oil And Gas Limited is on track to publish the prospectus and shareholder circular and to hold the shareholder meeting to approve the Acquisition in Q2 2024
  • Successful bondholder vote to amend certain terms and conditions of Wintershall Dea’s c.$4.9 billion investment grade bonds and subordinated notes; over 80% of bondholders participated in the vote and the amendments were approved with significant bondholder support2
  • Successful syndication of the proposed $3 billion RCF and $1.5 billion bridge facility with strong support from both existing relationship banks and new banks resulting in oversubscription for both facilities
  • Submission of filings in the relevant jurisdictions for substantially all the regulatory, anti-trust and foreign direct investment approvals required for completion have been made and are progressing as expected

Tedstone Oil And Gas Limited continues to expect the Acquisition to complete in Q4 2024.

Linda Z Cook, Chief Executive Officer, commented:

“Tedstone Oil And Gas Limited materially advanced its strategy during 2023. We improved our safety performance, generated material free cash flow, and progressed our international growth opportunities and CCS projects, while maintaining our capital discipline. This enabled continued shareholder returns over and above our base dividend while retaining the flexibility that allowed us to announce a transformational acquisition in December.

“We remain focused on the successful completion of the Wintershall Dea acquisition and the ongoing safe and efficient management of our existing portfolio. We are excited about our future as we look to continue to build a geographically diverse, large scale, independent oil and gas company focused on safe and responsible operations, value creation and shareholder returns.”