Tullow announces €40m of cost cutting
Irish-listed Tullow Oil is to incur a $45m (€40m) charge related to its cost-saving programme in light of weak oil prices, the firm said in a trading update.
The company, which reported its first loss in 15 years in 2014 as low prices forced it to write off some of its assets, reported first-quarter production from its West African and European fields as predicted at 65,800 barrels of oil equivalent per day and 9,000 per day, respectively.
The trading update from the firm said that this was broadly in line with estimates, and added that revenue and cost of sales were also in line with expectations. Capital expenditure for the year remains unchanged at $1.9bn. Net debt for the firm stood at around $3.5bn on April 24, Tullow said.
Tullow boss Aidan Heavey said that the company is now looking for acquisitions.
Speaking in London yesterday Mr Heavey said: "We can go out and look for opportunities. M&A has always been part of what we do." He also ruled out any takeover of the company.
Tullow's shares have risen around 48pc since Shell's $70bn proposed tie up with BG Group PLC earlier this month amid investor bets that the Africa-focused company could be an acquisition target.
Despite this Mr Heavey said the involvement of several African governments in its projects would make it too complicated to buy. You will be negotiating with every country in Africa. It's a monumental task, it's a distraction, we don't even think about it," he said.
The oil price squeeze has forced Tullow to scrap its 2014 dividend payment, one of the few oil firms to sacrifice shareholder payouts due to fallen profits.
But Tullow shares were also boosted earlier this week following a favourable ruling by an international maritime tribunal that allowed it to continue development of its TEN oil field off the coast of Ghana, removing a major uncertainty obstacle.