Tullow Oil on track to hit production and cash flow guidance

Tullow Oil has said it's on track to deliver full-year guidance and remains well placed to capitalise on a higher oil-price environment.

In a trading update at its annual general meeting in London on Thursday, the Ireland-based oil and gas group said group working interest production averaged 59,000 barrels of oil equivalents per day, including 7,000 boepd of gas production – within its expected range.

Guidance for the full year remains at 62,000-68,000 boepd, though it's likely the outcome will be at the lower end of that range.

Tullow is still guiding to full-year free cash flow of between $200m and $300m, based on prices at $80 a barrel, though the result will be weighted towards the second half of the year due to the timing of cash tax payments, liftings and revenue receipts and phasing of capital spend.

Oil prices have risen strongly since the start of January, when Brent crude was trading around the $75-a-barrel mark. Prices surged to above $90 in April on the back of rising tensions in the Middle East, but have come down to the mid-$80s since.

Tullow said that if 2024 prices averaged $90 a barrel – up $10 on current assumptions – it would generate an additional $100m of free cash flow.

"Since the start of the year, we have seen good delivery of our operational programme. We are on track to deliver our free cash flow expectations of c.$600 million over 2024 to 2025 at $80/bbl and we are well placed to capitalise on a higher oil price environment," said chief executive Rahul Dhir.

"At the same time, we are positioning ourselves to deliver material sustainable free cash flow in 2026 and beyond."

The stock was up 1.4% at 37.41p by 1008 BST.