Tullow Oil raises hedging to 75% of output for two years

Irish-founded Tullow Oil said on Wednesday it was increasing the volume of oil it protects with hedging to 75 per cent of the company's output for the next two years. It plans to hedge 50 per cent of output for a year beyond that.

The oil producer had previously hedged around 60 per cent of its output one year into the future and 30 per cent in the second year.

Set up in the 1980s to produce oil and gas in Africa, Tullow has historically focused on exploring discoveries, but the oil price collapse last year forced the company and its rivals to slash exploration budgets.

In May, Tullow emerged from a financial overhaul with a $1.8 billion (€1.4 billion) bond sale and a new business plan under top boss Rahul Dhir.

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The company has focused on reducing debts, significantly cut capital allocation to long-cycle projects and has raised over $700 million (€581 million) through sales of interests in Uganda, Equatorial Guinea and the Dussafu Marin permit in Gabon.

It said on Wednesday it was on track to realise more than $1 billion (€831 million) over two years through assets sales and cost cuts.

“We have shifted our focus away from exploration and development and long-cycle capital commitments to a production-focused company with a robust, cash generative business plan,” Mr Dhir said in a statement.

Tullow said it planned to drill four wells in 2021. Its group production to the end of May was in line with its expectations and averaged about 62,000 barrels of oil per day. – Reuters