Tullow Oil expects to record impairment of up to $1.7bn

Oil and gas explorer Tullow Oil expects to record an impairment of up to $1.7 billion (€1.44 billion) as a result of lower oil price forecasts and a downward revision to the group's long-term oil price assumption.

In a stock market update on Wednesday, the explorer with licences across Africa and South America said it expects material impairment and exploration write-offs in the range of $1.4 billion to $1.7 billion before tax.

Revenue for the first six months of this year is expected to be $700 million while net debt at June 30th is expected to be $3 billion.

The Irish-founded explorer updated shareholders on the sale of its Ugandan assets also. It said the sale, for up to $575 million, is expected to complete before the year end.

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That transaction “represents an important first step to raising in excess of $1 billion proceeds from portfolio management in what continues to be a challenging external environment”, the company said.

Efficient

"In the second half of 2020 our focus will remain on continuing to deliver safe and reliable production from West Africa, reducing debt and building a cost effective and efficient organisation that can compete in a low oil price environment," said Rahul Dhir, the company's chief executive since July 1st.

The London and Dublin-listed company’s production in the first half of the year was “in line with expectations”, averaging 77,700 barrels of oil per day. Full year production guidance has been narrowed to between 71,000 and 78,000 barrels of oil per day.