Tullow Oil said 2016 was another tough year for the firm in its latest trading statement.
Chief executive Aidan Heavey said: “2016 was another tough year for the oil & gas sector and for Tullow.
“However, the Company showed exceptional resilience and strong operational performance to deliver TEN on time and on budget; to deal with the technical issues at Jubilee; make good progress in exploration and development in East Africa and begin the process of reducing our debt from free cash flow.
“Tullow is therefore now very well placed to take advantage of the opportunities that conditions in the sector offer. We took action early to deal with lower oil prices and we are now benefitting from the re-set and re-structured business that we created. Our $900million farm-down in Uganda this week is clear evidence of the commercial attractiveness of our East African portfolio and our ability to manage our assets according to the strategic and financial needs of the business.”
In 2017, Tullow’s West Africa working interest oil production, including production-equivalent insurance payments, is expected to average between 78,000 and 85,000 bopd. Europe working interest gas production is expected to average between 6,000 and 7,000 boepd.
Its Jubille field in Ghana is expected to average 68,500 bopd (net: 24,300 bopd), assuming 12 weeks of shutdown associated with the next phase of remediation works.
At the end of 2016, Tullow had total facility headroom and free cash of $1 billion and net debt of $4.8 billion, which includes the $300 million Convertible Bond offering in July 2016.
The group’s capital expenditure associated with operating activities is expected to reduce from $0.9 billion in 2016 to $0.5 billion in 2017.
The firm also made several board changes, including naming a new CEO. Find out who here.