(Alliance News) - Tullow Oil PLC on Wednesday highlighted progress on debt reduction, saying it stands at a "pivotal moment", as new production from its oil fields offshore Ghana is coming "imminently".
Tullow said it produced about 53,000 barrels of oil equivalent per day in the first half of 2023. This is down from 61,100 barrels per day throughout 2022. Tullow kept its full-year guidance for 2023 at 58,000 to 64,000.
The expected increase in production in the second half is due to the Jubilee South East project coming onstream. This is expected "imminently", Tullow said. It will raise gross production from Jubilee to over 100,000 barrels of oil per day, which Tullow and its partners plan to maintain for the next few years by means of infill drilling.
In the first half of 2023, the existing wells at Jubilee averaged net production of 28,000 barrels per day. Those at the TEN fields, also offshore Ghana, averaged 11,000. Net production from Gabon and Ivory Coast was 14,000 barrels of oil equivalent per day.
Total revenue in the first half of 2023, including the cost of hedging, was about USD800 million. This compares to USD846 million in the first half of 2022. Average realised oil price after hedging was USD74 per barrel, down from USD87 a year before.
Capital expenditure in the recent six months was USD200 million, and guidance for the full year remains unchanged at USD400 million.
Tullow said free cash flow was negative by USD100 million in the first half, as expected, but this is expected to reverse in the second half, with USD200 million in positive free cash flow forecast.
The output from Jubilee South East is expected to help "materially deleverage our business", Tullow said.
The company reduced gross debt by USD266 million in the first half of 2023. Total net debt is now USD1.9 billion, and this is expected to fall to USD1.7 billion by year-end.
"This is an exciting time for Tullow and a pivotal moment in 2023 as we are on the cusp of the start-up of Jubilee South East, a project that demonstrates our operational capability and continued investment in Ghana's world-class Jubilee field," said Chief Executive Officer Rahul Dhir.
Tullow shares were down 4.4% at 28.62 pence in London on Wednesday morning. The stock is down 35% over the past 12 months.
By Tom Waite, Alliance News editor
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Tullow Oil (TLW)