Tullow Oil to return dividends beginning next year
TULLOW Oil has said it will start to pay shareholders a dividend from next year.
The dividend, paid on a semi-annual basis, will be based on the group's free cash flow generation.
The company expects to pay out at least €88m in 2019.
With respect to this year, Tullow's board will review the potential for a one-off ordinary dividend after the year-end.
Tullow CEO Paul McDade said that the group had made "excellent operational and financial progress over the past 18 months".
"Having reached our target of being a balanced self-funding exploration and production business, and having embedded cost discipline across the group, this is the right time to reinstate a dividend and focus on our plans for growth," Mr McDade said.
At its Capital Markets day in London yesterday, the African-focused company also announced plans to drill between three and five oil wells a year globally.
It added that its Guyana discoveries could start production in three years.
Tullow said it has decided to cancel its undrawn $350m revolving credit facility six months before it matures due to the strength of its balance sheet. This will result in cost savings from reduced fees.
Tullow also announced that it has agreed with Discover Exploration to farm into Blocks 35, 36 and 37, offshore the Union of the Comoros in the Indian Ocean.
The group will operate the three blocks and hold a working interest of 35pc.
(Additional reporting Bloomberg)