Tullow Oil hit by payment delay, but sees higher output

A delay in receiving payment from the sale of a stake in Ugandan oilfields caused Tullow Oil to miss cash flow and debt forecasts on Wednesday, although the company said it expected to receive the money soon and also forecast higher production.

The Africa-focused company said it expected production to grow to between 94,000 and 102,000 barrels of oil equivalent per day (boed) this year from 90,000 boed last year, as it increases output in Ghana.

Tullow had previously expected about $208 million (€182 million) from selling part of its stake in Ugandan oilfields to come in before the end of 2018, but the timeframe slipped, hitting its free cash flow and debt reduction plans.

Slumped

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 prices slumped by more than a third in the second half of 2018 to below $50 a barrel.

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The company’s net debt at the end of last year stood at $3.1 billion, higher than the $2.8 billion forecast.

The company said it had hedged around 55,700 barrels of oil per day (bopd) at a floor of $56.24 a barrel this year.

Its 2020 hedging position locked in 25,000 bopd with an average floor price protected of $59.00 a barrel. – Reuters