Monday 19 August 2019

Tullow Oil shares fall on revised output guide

Tullow Oil CEO Paul McDade. Photo: Bloomberg
Tullow Oil CEO Paul McDade. Photo: Bloomberg
Ellie Donnelly

Ellie Donnelly

Shares in Africa-focused Tullow Oil were down almost 3pc in afternoon trading yesterday after the group revised its production guidance downward.

The group now expects to deliver 89-93,000 barrels of oil per day, a reduction from previous estimates of between 90,000 and 98,000 barrels.

The decrease is due to delays in the completion of its latest well in the Ten fields, offshore Ghana.

In Uganda, where the Dublin-listed company is reducing its interest, Paul McDade, CEO of Tullow, said the group was continuing to try reach an agreement with the government on the financial terms and conditions of the deal. This is delaying the payment of more than $200m (€179m) from French explorer Total.

Elsewhere, Tullow reports its Kenya development is "progressing well", with Heads of Terms having been signed with the government.

Tullow will make a final investment decision in the second half of next year.

In the six months to 30 June, the group reported revenue of $872m, according to its interim results.

Gross profit increased to $527m from $521m the prior year. Net debt and gearing reduced to $2.9bn and 1.8 times.

The board also confirmed an interim dividend of 2.35 cents per share or $33m.

Job Langbroek, analyst at Davy, said the group's financial performance "remains very solid with good cost control."

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