Belfast Telegraph

Technical problems force Tullow to cut production forecast

Progress: Tullow CEO Paul McDade
Progress: Tullow CEO Paul McDade

By Ellie Donnelly

Irish company Tullow Oil has lowered its oil production guidance for the year to 90,000 to 98,000 barrels per day following technical issues in Ghana.

The firm said the problems at the Jubilee field and 10 other projects in west Africa had since been resolved.

The Dublin-listed company previously forecast oil production of 93,000 to 101,000 barrels of oil per day for the year.

Shares in the group were down 1.5% in afternoon trading yesterday, having earlier fell by over 5%.

The firm's stock has climbed by a third this year, following bullish 2018 results.

However, it is still 80% below the highs it reached in 2012.

In the first three months of this year Tullow produced an average of 84,600 barrels of oil per day, according to a trading update from the group.

Current production is back up to approximately 95,000 barrels a day.

Job Langbroek, analyst at Davy Stockbrokers, said that while there would be a focus on the dip in production, "this should not distract from a strong production profile over the full year and the potential for free cash generation and subsequent debt reduction".

In the past three months the group has won three new licences in the Malvinas West Basin, with work due to begin at the sites in 2020.

Tullow said a final investment decision in respect of Kenya by the end of the year remained "an ambitious target".

Yesterday shareholders approved the group's first dividend payment since 2014, which chief executive Paul McDade said reflected "the financial and operational progress that Tullow has made over the past few years".

"Oil production from our west African portfolio is currently running at 95,000 barrels of oil per day after a short-term production issue in the first quarter and is due to grow in the second half of the year and beyond," Mr McDade added.

The company's "big focus" is now Guyana, the CEO, who took over from Aidan Heavey two years ago, explained.

Since joining Tullow, Mr McDade has introduced tighter capital discipline and exploration in new areas.

Elsewhere, Dublin-headquartered Falcon Oil and Gas has reported a loss of $1.3m (£1m) for 2018.

Falcon, which is concentrated in Australia, had net cash of $6.9m (£5.3m).

The company has a joint venture with Origin Energy, operator of the Beetaloo licences, in Australia's Northern Territory.

Belfast Telegraph