Tullow Oil beats free cash flow expectations, faces Ghana tax bill

Tullow Oil said it expected to report better-than-expected free cash flow of $267m, up from $245m a year earlier and said it was facing a large tax bill on its assets in Ghana as tax incentives wind down.

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Revenue was expected to come in at $1.7bn, including hedge costs of $313m at an average realised oil price of $87 a barrel.

Tullow Oil faces a large $300m tax bill in Ghana and has challenged efforts from the government there to pay more tax on historical trading. The company says the assessments are “without merit" and is holding talks with officials in an attempt to resolve the dispute on a “mutually acceptable basis”.

The Africa-focused miner said it would invest $400m this year, mainly on fields in Ghana, and forecast 2023 free cash flow to come in at $200m at oil price of $100 a barrel or half that figure at $80.

Tullow guided for $700-$800 million in free cash flow for the 2024-2025 at an assumed oil price of $80 a barrel. It expects to produce between 58,000 and 64,000 barrels per day this year, broadly in line with 2022.

Reporting by Frank Prenesti for Sharecast.com