Tullow cuts full-year production forecast for second time

Irish exploration company Tullow Oil has cut its full-year forecast for oil production for a second time amid delays at its flagship Ghana field.

In September the London-listed firm trimmed the upper end of its production outlook for this year to 58,000-60,000 barrels per day (bpd) from 58,000-64,000 bpd.

In a trading update on Wednesday, Tullow said full-year net oil production was now expected to be marginally below this new revised level.

“This was primarily due to Jubilee South East schedule delays and reduced water injection, which is being resolved with higher water injection rates anticipated by year end,” it said.

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Tullow said, however, its full-year free cash flow guidance increased from $100 million to $150 million primarily driven by increased sales volumes in Gabon and deferral of some capital expenditure.

Year-end net debt is expected to be $1.6 billion.

The company recently secured a new $400 million five-year debt facility with proceeds available for liability management of the senior notes maturing in March 2025.

Chief executive Rahul Dhir said: “As we approach the end of the year, Tullow’s financial position continues to improve. The $400 million debt facility agreed with Glencore is a material step in our refinancing strategy and demonstrates Tullow’s continued ability to access long-term capital.”

“With Jubilee South East onstream, our portfolio is generating increased free cash flow, which is accelerating our deleveraging, and we remain on track to deliver c.$800 million of free cash flow between 2023 and 2025,” he said.