Dec 13 (Reuters) - Ratings agency S&P Global on Friday
downgraded Tullow Oil's long-term credit rating to 'B'
from 'B+', days after the Africa-focused company's Chief
Executive Officer stepped down and it scrapped its dividend.
The London-listed company, which failed to meet production
targets due to weak performance by flagship assets in Ghana,
has been plagued by technical problems at its Jubilee field in
the country and a delay in completing a well at the TEN offshore
field.
Tullow also suffered blows in recent months due to setbacks
at East Africa projects in Uganda and Kenya where it is yet to
reach final investment decisions, as well as to its plans to
develop oil fields in Guyana, one of the world's hotbeds for
exploration, where oil it discovered was of a lesser quality
than hoped.
"Although we understand that it (Tullow) plans to use its
financial flexibility to offset the lower profitability and
maintain positive free cash flow, we see a less robust business
that has weaker credit metrics," S&P said in a statement.
S&P also said it was revising downward its projections for
Tullow's adjusted earnings before interest, taxes, depletion,
amortization, and exploration expense (EBITDAX) to $1.3
billion-$1.4 billion in 2019 and about $1.1 billion in 2020.
"The negative outlook indicates that we could lower the
rating on Tullow in the coming six to 12 months if the company
saw a further deterioration in its credit metrics stemming from
lower production and/or oil prices, or if we saw a deterioration
in its liquidity position," the rating agency warned.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Mark
Potter)
Tullow Oil (TLW)