In a Trading Update for the period raning from 1 January to 25 April 2018 released on Wednesday, British oil firm Tullow Oil reported that it is experiencing a strong progress in 2018 and continues to generate free cash flow.
This positive progress is largely facilitated by their operations in West Africa, specifically in Ghana where drilling programme at the TEN and Jubilee fields ‘are underway’ and will ‘remain on track to deliver on our existing production guidance,’
An optimistic Paul McDade, Chief Executive Officer, Tullow Oil, said their Ugandan and Kenyan developments are on track with a Final Investment Decisions expected this year and another in Kenya next year.
“We are preparing for the start of our multi-year exploration programme across our diverse portfolio of exploration prospects in Africa and South America,” McDade said.
Adding: “The progress we have made is due to the hard work and financial discipline of the team and the support of our shareholders, allowing us to focus on growing our business and delivering returns.'
The Tullow Group which is holding its Annual General Meeting (AGM) in London is expected to announce its Trading Statement and Operational Update on 27 June 2018 and Half Year Results will be announced on 25 July 2018.
Highlights from trading update
- Strong production at TEN in Ghana and across our non-operated portfolio delivered average first quarter net oil production of 87,700 bopd, including production-equivalent insurance payments. Full year guidance remains 82,000-90,000 bopd
- Drilling of first new production well on the Ntomme field in TEN is under way; contracting of second rig is under review; first shut-down to stabilise turret bearing at Jubilee FPSO completed successfully
- Progress towards Final Investment Decision (FID) in Kenya in 2019 continues; upstream and pipeline Front End Engineering Design (FEED) and Environmental Social Impact Assessment (ESIA) work progressing to plan
- Uganda farm-down to Total and CNOOC awaiting Government approval; Lake Albert development progressing towards FID in the second half of 2018
- Exploration team continues to mature prospect inventory and drill queue for three-year exploration programme, which will start with the drilling of the Cormorant wildcat well, offshore Namibia, in the third quarter of 2018
- Successful issue of $800 million of senior notes due 2025 further extending debt maturities; voluntary cancellation of $150 million of commitments under the Revolving Corporate Facility (RCF), further optimising balance sheet
- Net debt reduced to $3.4 billion at 31 March 2018; current headroom and free cash of approximately $1 billion
- 2018 capex forecast of $460 million remains unchanged; Uganda expenditure of $110 million expected to be repaid following completion of Uganda farm-down
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