Tullow Oil’s production is set to grow to between 94,000 and 102,000 barrel of oil equivalent per day (boe/d) this year, it said in a trading update on Jan. 16, from 90,000 boe/d last year as it increases output in Ghana.
The Africa-focused company had previously expected around $208 million from selling part of its stake in Ugandan oil fields to come in before the end of 2018, but the timeframe slipped which weighed on free cash flow and debt reduction.
Free cash flow stood at $410 million. It had previously said its cash flow for 2018 could reach as much as $700 million. Crude oil slumped by more than a third in the second half of 2018 to below $50 a barrel (bbl).
Tullow’s net debt at the end of last year stood at $3.1 billion, higher than the $2.8 billion forecast.
Uganda’s energy minister said on Dec. 20 that she had given Tullow conditional approval to sell part of its stake in Ugandan oil fields to France’s Total (NYSE: TOT) and China’s CNOOC, but only after $167 million of tax on the deal is paid, a view Tullow disagrees with.
Tullow said in November it would return to paying dividends, which it suspended in 2015 due to the oil price crash, and expects to pay out at least $100 million from 2019 with an option for a special dividend for this year.
Tullow said it had hedged around 55,700 barrels of oil per day (bbl/d) at a floor of $56.24/bbl this year.
Its 2020 hedging position locked in 25,000 bbl/d with an average floor price protected of $59.00/bbl.