Tullow Oil raises expected profits, however its Jubilee field will close temporarily
Tullow Oil has raised its profit guidance for the first six months of the year as a result of strong oil production and an insurance payment.
The group said today in its trading statement that it expects to generate $0.6bn of pre-tax operating cash flow for the six months to 30 June 2017.
The company, which operates largely in Africa, confirmed that it also expects its debt to reduce for the first six months of the year to $3.8bn, a reduction of $0.95bn since year-end 2016, following the receipt of rights issue proceeds as well as cash flow generated from operations.
The Group, who's chief financial officer resigned from the firm's board in June due to ill health, said that unutilised debt capacity and free cash at the end of June 2017 is estimated to be approximately $1.2bn.
However, the company's Jubilee field will close for up to eight weeks later this year due to a bearings issue, despite this, the full year net production guidance from this field remains unchanged.
Commenting on the update, Paul McDade, who in April this year became CEO of Tullow, said that the company continues to make good progress, despite what he referred to as “tough market conditions.”
“Our recent rights issue and free cash flow from our low cost, producing assets have resulted in a significant reduction in our debt and provided the group with greater financial and operational flexibility,” Mr McDade said.
In May this year Tullow Oil announced the discovery of oil in a well in Northern Kenya, which is described as an “important discovery” for the company.