Tullow Oil has terminated a drilling contract with the Maersk Venturer in Ghana, in line with the operator’s plans to save cash amid a difficult year.
Maersk Drilling announced the early termination of the contract with the Maersk Venturer. Tullow Ghana chose to end the contract for convenience, it said.
The Maersk Venturer began working for Tullow Ghana in February 2018 and had been expected to work until February 2022. The new date for work to end is June 2020.
Maersk Drilling said its revenue backlog would be reduced by $175 million for the period between mid-2020 and February 2022.
The drilling company said it would take unspecified measures to reduce the rig’s operating costs as a result of the end of the contract.
Despite this move, Maersk said it still expected EBITDA this year – before special items – to be $325-375mn, in line with its announcement on March 20.
Maersk said it had reassessed the state of the industry, in the statement last week, cutting EBITDA expectations from $400-450mn. In 2019, EBITDA was $415mn. Capital expenditure is expected to be $150-200mn this year, down from $309mn in 2019.
Tullow set out plans to slash capex and increase asset sales in mid-March. It will also reduce staff numbers by around one third.