(Sharecast News) - Shares in Tullow Oil soared on Wednesday after the independent oil and gas explorer said the start-up of the Jubilee South East operation off Ghana helped to drive production and lifted 2023 cash flow ahead of expectations.
The company on Wednesday said it was on track to deliver around $600m in free cash flow over the next two years to achieve its stated target of $800m from 2023 to 2025.
Five Jubilee wells were expected to come onstream in 2024, concluding the activity planned at the start of the drilling programme approximately six months ahead of schedule with excellent drilling performance.
Year-end net debt was reduced by about $250m to $1.6 bn.
"Having invested heavily into their fields in recent years, the group is now reaping the benefit of the cash flows created by rising production," said Steve Clayton, head of equity funds at Hargreaves Lansdown.
"Problems with field engineering encountered earlier in 2023 have now been resolved and the Jubilee field is now producing over 100,000 barrels per day, underpinning the group's cash flows."
"Having arranged a borrowing facility with Glencore, the group now has no further debt maturities this side of 2026, giving Tullow the headroom to bring borrowings sharply lower. It's a much more secure position for the group than just a year or two ago when they were beset by operational and financial challenges. "
Reporting by Frank Prenesti for Sharecast.com
Tullow Oil (TLW)