Acquisitions and high fuel prices boosted first-half profits at Dublin- and London-listed Tullow Oil by more than 400 per cent, results released yesterday show. Barry O'Halloran reports.

Group sales for the first six months of 2005 were £201 million (€299 million) from £76.5 million during the same period last year.

Oil accounted for £134.2 million of the total, with gas contributing the remaining £67 million. The bulk of Tullow's gas comes from the southern blocks of the North Sea, where the Irish company is now the dominant natural gas player. West Africa accounted for close to £117 million in oil sales.

Operating profits before a £4 million charge for exploration activities were £108.4 million, a 318 per cent increase on the £25.8 million recorded during the first half of 2004.

A £7 million interest charge left the company with a 427 per cent increase in profit before tax for the first half to £91.3 million from £17.3 million, a £74 million increase in cash terms.

Basic earnings per share (eps) grew along similar lines to 9.82 pence from 1.98 pence. The company is doubling its interim dividend to one penny per share.

Tullow's share price added 1 cent in Dublin yesterday to close at €3.34 cent.

Operating cash flow was also strong, posting a 130 per cent increase to £116 million. During the period, the group invested a total of £73.4 million in exploration activities.

More than 80 per cent of this was spent in areas where Tullow already has wells, pipelines and other infrastructure, and is geared at enhancing its existing properties.

It is in the process of consolidating debts into one £850 million facility. The company's statement yesterday said that this is almost complete and the syndication was oversubscribed.

Chief executive Aidan Heavey said that high oil prices, the inclusion of a six-month contribution from last year's acquisition, Energy Africa, and a three-month contribution from Schooner and Ketch, which it bought this year, boosted the company's performance. "We have a very large spread of interests in a lot of different countries and most of them are low-cost production, so we are benefiting a lot from oil and gas prices," Mr Heavey told The Irish Times.