Tullow Oil Sees 2021 Free Cashflow at $250M

Shadia Nasralla
Wednesday, January 26, 2022

West Africa-focused Tullow Oil expects its 2021 free cash flow to come in higher than previously forecast at $250 million and expects this year's cash flow to come in at $100 million at an oil price of $75 a barrel, it said on Wednesday.

Tullow, with a market capitalization of around $1 billion as of Tuesday, is focusing on reducing its $2.1 billion debt pile and has hedged 50%-75% of its output of around 60,000 barrels of oil equivalent per day between $51 and $78 a barrel to 2024.

The hedging cost is between $1.6 and $2 per barrel, it said.

Benchmark crude oil futures are trading near $90 a barrel, with much of last year's third quarter above $80. Tullow had said in November it saw its 2021 free cashflow at $100 million.

"(2021) free cash flow is expected to be c.$250 million, ahead of guidance, driven by continued focus on costs, supportive oil prices in the latter parts of 2021 and favorable working capital movements," Tullow said in a trading statement.

Lower free cashflow in 2022 would include a $75 million payment from divesting its Uganda assets, but also higher decommissioning spending and investments of $350 million, most of which is going to its flagship fields offshore Ghana.

It is due to report full-year results on March 9.

Tullow is seeking new investors for its yet-to-be-developed projects in Guyana and Kenya, having submitted a revamped $3.4 billion development plan for some of its onshore Kenyan oilfields last month, it said.

There is no guidance yet on the timing or size of partial divestments from those projects, Chief Executive Rahul Dhir said.

 (Reporting by Shadia Nasralla, Editing by Louise Heavens)

Categories: Finance Production Africa Activity Industry News Energy

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