Tullow Oil plc (Tullow) has issued an update on its business operations and full-year guidance for 2024, highlighting stable group production alongside challenges at its flagship Jubilee oil field in Ghana.

The update also touched on operational progress across other key assets in Africa, its financial position, and plans for the future.

As of late 2024, Tullow’s group production averaged approximately 62,000 barrels of oil equivalent per day (kboepd), which includes 6,500 barrels per day (kbopd) of gas. This performance aligns with previously issued guidance.

The company’s flagship Ghana Jubilee oil field, however, recorded an average production of 89,000 barrels per day (kbopd) gross (approximately 34,500 kbopd net) through the end of October. This figure fell short of expectations, attributed to the underperformance of the J69-P well.

Despite these challenges, CEO Rahul Dhir expressed optimism, stating “Our cash generative business enables us to continue our deleveraging progress.”

“This has been achieved despite underperformance at the Jubilee field, offset in part by strong performance at TEN, lower capital intensity, and a continued focus on cost management.”
Rahul Dhir, CEO of Tullow Oil plc

To address these setbacks, Tullow has increased water injection capacity to approximately 300,000 barrels per day (bwpd) and reported gas offtake levels of 100 million standard cubic feet per day (mmscfpd).

The company expects these measures, coupled with further production optimization efforts, to mitigate declines in the latter half of 2024.

The TEN (Tweneboa, Enyenra, and Ntomme) oil field has remained a bright spot in Tullow’s portfolio, maintaining consistent performance. As of the end of October, production at TEN averaged 19 kbopd gross (approximately 10.5 kbopd net), surpassing expectations.

Tullow plans to initiate a 4D seismic program in January 2025 to enhance its reservoir models. This advanced seismic data is expected to help optimize well locations for upcoming drilling campaigns, potentially improving long-term output and efficiency at its Ghana operations.

Tullow’s non-operated production in Gabon and Côte d’Ivoire is on track to average 10.5 kbopd net in 2024, consistent with projections.

Tullow noted that the Simba field in Gabon, which had been offline since March, was successfully restarted in August.

Additionally, Tullow indicated a discovery at the Sarafina infrastructure-led exploration (ILX) well is under evaluation for commercial viability, signaling growth potential.

Tullow has completed decommissioning activities in the Banda/Tiof fields in Mauritania ahead of schedule and under budget. The accelerated timeline reflects Tullow’s focus on cost efficiency and operational discipline.

Financial Performance and Guidance

Tullow secured an extension for its Revolving Credit Facility (RCF), now valid until June 2025, with a capacity of $250 million. This extension highlights the company’s strong banking relationships and financial flexibility as it continues to refinance its debt.

Tullow revised its free cash flow forecast for 2024 to a range of $150–200 million, down from the earlier guidance of $200–300 million.

Tullow faces several challenges as it heads into 2025, including production volatility at Jubilee, reliance on payment resolutions from the Ghanaian government, and ongoing debt management.

CEO Rahul Dhir concluded, “We are well positioned to optimize our capital structure and look forward to progressing plans to address our remaining debt maturities.”

Tullow reaffirmed its 2024 guidance for group production at around 62 kboepd. Capital expenditure and decommissioning spending remain on track at $230 million and $70 million, respectively.

However, the final cash flow position will depend on realized prices for four remaining cargos, progress on the overdue Ghana gas payments, and working capital movements.

Tullow Oil’s 2024 update painted a picture of a company balancing operational challenges with financial discipline and strategic investments.

While underperformance at the Jubilee field presents hurdles, stronger-than-expected results from TEN and non-operated assets, coupled with prudent cost management, provide a pathway for stability and growth.

As the year progresses, Tullow’s ability to optimize production, manage debt, and navigate regional complexities will be pivotal to achieving its long-term objectives.