Tullow Oil raises production guidance on Ghana fields
Company cuts its 2017 capital expenditure guidance by about $100m to $300m
Paul McDade, CEO, Tullow Oil. Photograph: Nick Bradshaw
Tullow Oil raised its production guidance on Wednesday, aided by higher output from its TEN and Jubilee fields in Ghana.
The company now expects full-year West Africa net oil production, including production-equivalent insurance payments, to come in at 85,000-89,000 barrels of oil per day (bopd) compared with its prior guidance of 78,000-85,000 bopd.
Full-year gross production guidance from Jubilee was raised to around 89,000 bopd, while production from the multi-billion dollar TEN deepwater oil and gas project is now expected to exceed the original guidance of 50,000 bopd.
Kosmos Energy said on Monday it expects to resume development drilling on the TEN deepwater oil and gas project in early 2018, rather than around the end of this year as it previously expected.
Kosmos, Anadarko Petroleum, Ghana National Petroleum and PetroSA also have stakes in the TEN project.
In September, the International Tribunal for the Law of the Sea drew an ocean boundary favouring Ghana in a maritime border dispute with neighbouring Ivory Coast, opening the way for development drilling to resume on the TEN project.
Tullow also said it expected to generate about $400 million in free cash flow for 2017, helped by strong production and higher oil prices in the second half of the year.
Prices of globally traded Brent crude have averaged $54.13 per barrel so far in the second half of 2017, about 10 per cent higher than the $48.99 seen in the second half of last year.
The company, which was forced to plug and abandon an exploration well offshore Suriname last month after it failed to make a commercial discovery, said net debt fell to $3.6 billion at October 31st.
Tullow said it had formally commenced the re-financing of its reserves-based lending facility in October and was on schedule to complete the process before the end of the year.
Tullow also cuts its 2017 capital expenditure guidance by about $100 million to $300 million on Wednesday.