Tullow Oil narrows FY production guidance

Tullow Oil on Thursday narrowed full year oil production guidance to 87,000 – 91,000 barrels a day.

In a trading update, the company said its West Africa oil assets had performed strongly throughout the year, delivering production in line with expectations.

Full year gas production is expected to average around 2,300 barrels of oil equivalent a day, Tullow said.

Full year free cash flow was forecast to be $700m on the back of strong production and higher prices, including Uganda farm-down proceeds of $200m, with net debt and gearing reducing from $3.5bn and 2.6 times to $2.8bn and 1.8 times respectively by year-end.

Chief executive Paul McDade said the period from July 26 to November 15 had been “solid” against the backdrop of continued oil price volatility.

“We are generating high levels of free cash flow from our West African assets, making good progress towards project sanctions in East Africa and are finalising our 2019 exploration programme which we expect to include high-impact wells in Guyana,” he said.

The company lowered full-year capital expenditure forecasts to around $430m following savings, farm-downs and some work program deferrals. Earlier guidance was $460m.