(Alliance News) - Tullow Oil PLC on Wednesday said it delivered production in line with expectations during 2020 in spite of difficulties caused by the Covid-19 pandemic.
The South America and Africa-focused oil and gas company said it expects 2020 revenue to be about GBP1.4 billion, as working interest oil production averaged 74,900 barrels of oil per day - in line with its prior guidance - and the average realised price was USD50.8 per barrel. For comparison, 2019 revenue was USD1.7 billion, with production at 86,700 barrels of oil per day.
Tullow Oil said it forecasts gross profit to be USD400 million, a 43% decrease from USD700 million in 2019.
The company's capital expenditure for 2020 was USD290 million and its year-end net debt was reduced to USD2.4 billion from USD2.8 billion a year before, as a result of a USD430 million free cashflow. Looking ahead to 2021, it forecasts capital expenditure to be USD265 million.
Tullow Oil said it expects 2021 production to decline to 60,000 to 66,000 barrels of oil per day, due to a drilling hiatus, a planned shutdown on Jubilee in September, and deferred development drilling on Simba in Gabon.
"Despite the challenges that 2020 presented, Tullow delivered production in line with expectations, executed major reductions to its cost-base and reduced net debt through the Uganda asset sale. Tullow has a busy year ahead as we begin implementing the business plan that we laid out at our capital markets day. The plan is focused on ensuring that Tullow's producing assets in West Africa reach their full potential. We will leverage the new plan and our reduced cost base to generate positive free cash flow at current commodity prices, drive down our net debt and deliver a robust balance sheet," said Chief Executive Rahul Dhir.
Shares in Tullow Oil were down 1.9% at 30.64 pence in London on Wednesday.
By Zoe Wickens; zoewickens@alliancenews.com
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Tullow Oil (TLW)