Friday 17 August 2018

Tullow Oil reports 'strong' progress in 2018 as it continues to generate free cash flow

Tullow founder Aidan Heavey
Tullow founder Aidan Heavey
Ellie Donnelly

Ellie Donnelly

Tullow Oil has said that it continues to make "strong progress" in 2018.

In a statement ahead of its AGM today, Tullow, which primarily focuses its oil production and exploration activities in Africa, said that it continues to generate free cash flow from its "high-return" production assets in West Africa.

"The drilling programme is now under way at the TEN and Jubilee fields in Ghana and we remain on track to deliver on our existing production guidance," Paul McDade, CEO of Tullow Oil, said.

The full year guidance for TEN Ghana is 82,000-90,000 barrels of oil per day.

In East Africa the group said that its Ugandan and Kenyan developments are on track for final investment decisions in 2018 and 2019 respectively.

While the group also said that it is preparing for the start of its multi-year exploration programme across its diverse portfolio of exploration prospects in Africa and South America.

"The progress we have made is due to the hard work and financial discipline of the team and the support of our shareholders, allowing us to focus on growing our business and delivering returns," Mr McDade said.

During the period 1 January to 25 April the group issued $800m of senior notes due in 2025 to further extending debt maturities.

Net debt at the company reduced to $3.4bn at 31 March 2018 and the company said that it has current headroom and free cash of approximately $1bn.

Capital expenditure forecast for 2018 remains unchanged at $460m, while in Uganda expenditure of $110m is expected to be repaid following completion of Uganda farm-down.

Earlier this month Tullow confirmed that Aidan Heavey will chair his last board meeting at Tullow Oil in July, before departing the company he founded 33 years ago.

Dorothy Thompson has been named as Mr Heavey's successor. For 12 years, until the end of 2017, Ms Thompson served as chief executive of Drax, a power and energy trading company.

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