The Chief Executive Officer of Tullow Oil Plc, Rahul Dhir, has intimated that amidst the global crises and economic hardship wrought by the coronavirus pandemic, his outfit plans to focus on ensuring that its producing assets in West Africa reach their full potential.
Rahul Dhir made these statements in the recent ‘Trading Statement and Operational Update’ released by the renowned Oil company.
He further asserted that the impact of COVID-19 has been managed effectively across the Tullow Group with negligible impact on production, adding that the company as a whole had a working interest oil production average of 74,900 bopd in 2020, in line with guidance.
“Despite the challenges that 2020 presented, Tullow delivered production in line with expectations, executed major reductions to its cost-base and reduced net debt through the Uganda asset sale.
“Tullow has a busy year ahead as we begin implementing the business plan that we laid out at our Capital Markets Day.
“The plan is focused on ensuring that Tullow’s producing assets in West Africa reach their full potential. We will leverage the new plan and our reduced cost base to generate positive free cash flow at current commodity prices, drive down our net debt and deliver a robust balance sheet.”
In West Africa, Tullow Oil Plc operates in Ghana and Cote d’Ivoire. Giving further insights into their operations in Ghana, the company hinted that oil production from Jubilee and TEN for the year to date is in line with expectations, supported by gas offtake from the Government of Ghana of c.125 mmscfd.
“A new oil offloading system is being commissioned on Jubilee and is expected to be ready for a first lifting in February,” the report revealed, adding that a drilling rig is being mobilised to Ghana to commence operations in the second quarter of the year and the first new production well on Jubilee is forecast to be onstream in the third quarter.
For Côte d’Ivoire, Tullow has reduced its onshore exploration portfolio to focus on unlocking value from the CI-520 block.
Highlighting some of the company’s performance, the report indicated that 2020 full year revenue is expected to be c.$1.4 billion with a realised oil price of $50.8/bbl, including hedge receipts of c.$0.2 billion; gross profit is expected to be c.$0.4 billion.
Additionally, Capital and decommissioning expenditure for 2020 were c.$290 million and c.$50 million respectively with an accompanying Year-end net debt reduced to c.$2.4 billion as against $2.8 billion recorded in 2019.
This represents a reduction of approximately 14 percent and according to Tullow Oil Plc it is as a result of $430 million free cashflow.
“This includes Uganda proceeds of $500 million, c.$70 million of Group redundancy payments and negative year-end working capital adjustments of c.$50 million,” the report noted.
Finally, Tullow has forecasted its Group working interest oil production to average 60-66,000 bopd in 2021.
However, it cautioned that the forecast reflects the drilling hiatus in 2020, a planned shut-down in September on Jubilee and deferred development drilling on Simba in Gabon.
