Tullow Keeps 2023 Outlook for Lower Cash Flow, Shares Dip

Shadia Nasralla
Wednesday, March 8, 2023

Tullow Oil on Wednesday kept its forecasts for steady output and lower cash flow for this year, sending its shares lower, even as it reported higher free cash flows for 2022. 

The company plans to invest $400 million this year, mainly on its flagship fields in Ghana, expecting free cash flow to come in at $100 million at an oil price of $80 a barrel, or twice that at $100 a barrel, unchanged from previous guidance.

For 2022, free cash flow came in at $267 million, up from $245 million in 2021 and in line with forecasts.

With some tax incentives having run out, higher investments,  and new wells only starting in the second half to make up for declining output elsewhere, finance chief Richard Miller told a conference call cash flow would likely be negative in the first half before strengthening thereafter.

Tullow's shares were down around 2.3% to 33.5 pence at 1142 GMT, compared with a flat index for European oil and gas firms .SXEP.

Jefferies analyst Mark Wilson said in an email that even with new production coming onstream in the second half of the year, Tullow's overall production was expected to remain only steady.

He also pointed to the $100 million cash flow guidance for 2023 at $80 a barrel as a reason for the share price weakness, given oil prices are already at around $83 a barrel.

Overall, Tullow expects to produce between 58,000 and 64,000 barrels per day (bpd) this year, after 61,000 bpd in 2022.

The company plans to hedge around 40% to 50% of its output around a year out, Miller told Reuters.

Tullow hedged 33,100 bpd of this year's output and 11,300 bpd of 2024's production at between $55 and $75 a barrel. Last year, its revenue would have been $319 million higher without hedges.

(Reuters - Reporting by Shadia Nasralla, additional reporting by Muhammed Husain in Bengaluru; Editing by Louise Heavens and Mark Potter)

Categories: Energy Activity Production Africa

Related Stories

Russia's Sakhalin-1 Oil Production Back at Peak 200,000 bpd, ONGC Says

TechnipFMC to Supply Subsea Systems for Shell's U.S. Gulf of Mexico Project

Chevron Launches Sale of Congo Oil Assets - Sources

Current News

Equinor's Arctic LNG Plant to Resume Production Next Week After Gas Leak Shutdown

Equinor's Eggen Wildcat in North Sea Proves Dry

QatarEnergy in 15-Year LNG Supply Deal with Bangladesh

Plans Announced for LNG Export Facility in U.S. Gulf of Mexico

Subscribe for OE Digital E‑News