Tullow Oil’s production is set to grow to between 94,000 and 102,000 barrels of oil equivalent per day (boed) this year it said in a trading update on Wednesday, up from 90,000 boed last year as it increases output in Ghana.
The Africa-focused company had previously expected around US$208million from selling part of its stake in Ugandan oilfields to come in before the end of 2018, but the time-frame slipped – which weighed on free cash flow and debt reduction.
Free cash flow stood at US$410million. It had previously said its cash flow for 2018 could reach as much as US$700million. Crude oil slumped by more than a third in the second half of 2018 to below US$50 a barrel.
Tullow’s net debt at the end of last year stood at US$3.1billion, higher than the US$2.8billion forecast.
Uganda’s energy minister said on Dec. 20 that she had given Tullow conditional approval to sell part of its stake in Ugandan oilfields to France’s Total and China’s CNOOC, but only after US$167million of tax on the deal is paid – a view Tullow disagrees with.
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Tullow said in November it will return to paying dividends, which it suspended in 2015 due to the oil price crash; and expects to pay out at least US$100million from 2019, with an option for a special dividend for this year.
Tullow said it had hedged around 55,700 barrels of oil per day (bopd) at a floor of US$56.24 a barrel this year.
Its 2020 hedging position locked in 25,000 bopd with an average floor price protected of US$59.00 a barrel.