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TOP NEWS: Tullow returns to first-half profit, ups production outlook

Wed, 15th Sep 2021 09:46

(Alliance News) - Tullow Oil PLC on Wednesday raised its 2021 production guidance after swinging to a profit in the first half of the year, and announced the departure of its chief financial officer.

Shares were up 5.9% to 47.66 pence in London on Wednesday morning, making Tullow the top performer in the FTSE 250 index.

The West Africa-focused oil and gas producer made USD727 million in revenue in the period, down 0.5% year-on-year from USD731 million. Tullow made a pretax profit of USD213 million, after a loss of USD1.44 billion a year ago.

Production averaged 61,230 barrels of oil equivalent per day, down 21% from 77,700 boepd, following asset sales in Equatorial Guinea and Gabon.

The firm raised full-year production guidance, to between 58,000 and 61,000 boepd. The previous forecast, issued on July 14, was for between 55,000 and 61,000 boepd, and the upgrade reflects an acceleration of production at the Simba field in Gabon and the deferral of a planned shutdown of the Jubilee field in Ghana, Tullow said.

But full-year capital expenditure is now expected to be USD260 million, up from the earlier USD250 million forecast.

The company will continue to not pay a dividend. It hasn't made a payout since 2019's 2.35 cents-per-share interim.

The results are "in line with guidance and our forecasts," Davy analyst Colin Grant said in a note.

The first half was "principally about executing the transformational refinancing of debt liabilities in the group. This has been achieved and there are now no debt maturities until 2025," he added.

Net debt was reduced to USD2.29 billion on June 30 from USD3.02 billion a year before.

But the architect of the refinancing, Chief Financial Officer Les Wood, has "mutually agreed with the board that he will step down," the company said. He will leave at the end of March 2022, while Tullow searches for a replacement.

"Following our comprehensive refinancing earlier this year, the culmination of a number of steps to strengthen the group, it is the right time for me to leave Tullow after five years as CFO," Wood said.

By Ivan Edwards; ivanedwards@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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