Tullow Oil toughens Board’s oversight amid US$1.6 billion after tax loss
Tullow Oil PLC has announced that it has reinforced the oversight of its board of directors to boost the operations of the company after the company reported a loss after tax of US$1.6 billion for 2019 amid oil market woes.
This follows the oil exploration company losing almost a third of its market value on Thursday, March 12 after issuing a grim warning that material uncertainties in the market may cast significant doubt over its ability to keep operating.
Board Chairperson for Tullow PLC, Dorothy Thompson, speaking at the presentation of the 2019 financial results indicated that the board, over the last two quarters has sought to engage more the executive directors of the oil firm.
“Firstly, I would say the board has been much more engaged than you would normally see a board being engaged, through the last quarter of last year, and the first quarter of this year. There are a few specific areas that when we realized the nature of the challenges, we have put more focus; control would be a very good example,” she noted.
“One particular area is that we have made sure there is a very clear open and regular communication between the non-executive director, who is most skilled or has the expertise in oil reserves and oil resources, with our chief petroleum engineer,” Thompson added.
Dorothy Thompson also revealed that an agreement has been with its immediate past Chief Executive, Paul Mcdade to offer insight and advice to the board on the way forward after an intense and difficult period.
“He is actually one of the people contactable through our safe calls. We didn’t have a technical person available for the other side. So, we couldn’t have that technical engagement… The board has been more engaged and they are supporting as well,” she noted.
Thompson however assured that Tullow Oil’s asset remains robust due to the company’s low costs, a strong hedging position and substantial oil reserves.
Last year, Tullow surprised its investors by slashing its production forecast, scrapping its dividend and announcing that its chief executive and exploration director had left.
Paul Mcdade resigned as Chief Executive Officer together with Head of Exploration, Angus McCoss, in a fallout that saw the company’s share price plunged to a 16-year-low on the London Stock Exchange.