Tullow revises down production guidance on the back of delays
Tullow Oil has revised down its full year production guidance to 89-93,000 barrels of oil per day due to delays in the completion of its latest well in the Ten fields, offshore Ghana.
It had previously expected to produce 90,000-98,000 barrels of oil per day.
In the six months to 30 June, revenue was $872m (€780m), according to interim results from the group.
Gross profit increased to $527m (€472m) from $521m (€466m) the prior year.
Tullow’s net debt and gearing reduced to $2.9bn (€2.6bn) and 1.8 times.
The board confirmed an interim dividend of 2.35 cents per share or $33m, its first interim dividend since 2015.
The results were in line with analyst expectations.
Paul McDade, CEO of Tullow, said: “Today’s results demonstrate strong financial delivery in the first half of 2019 with robust profits and free cash flow.”
“We are disappointed that a mechanical issue at our latest Ten well has caused us to reduce our 2019 production outlook; however, our overall portfolio of low-cost West African production continues to provide a solid financial base for the business, allowing the group to invest for future growth, continue to reduce debt and pay dividends to shareholders.”
In the group’s Jubilee fields off the coast of Ghana, production was below expectations due to gas compression constraints during February, which have now been resolved.
Meanwhile, in Uganda, Tullow continues to consider the sale of its assets as it is unable to finalise an agreement with the Government of Uganda on the treatment of the farm down.
Its Kenya oil development is "progressing well", with Heads of Terms having been signed with the Government. The group will make a final investment decision in the second half of next year.
Elsewhere, the group’s capital expenditure forecast remains unchanged at $570m.
Looking forwards, the company said its new ventures team continues to make good progress across the entirety of its portfolio.
“We are currently anticipating results in early August from the Jethro wildcat well, the first of our three 2019 exploration wells in Guyana, all of which have the potential to make new oil discoveries in the world’s latest exploration hotspot,” Ian Cloke, vice president for New Ventures, said.
“New licences in Argentina, Peru and Namibia have been accessed in the first half of the year and we continue to evaluate and mature opportunities for potential drilling in 2020, including wells in Peru and Suriname.”