* Kenya early production scheme suspended due to bad roads
* Business review update due with FY results on March 12
(Adds detail)
LONDON, Jan 15 (Reuters) - Tullow Oil expects to
report a $1.5 billion writedown after lowering its long-term oil
price assumptions by $10 to $65 a barrel, an announced reduction
in reserves in Ghana and disappointing exploration wells, it
said on Wednesday.
"Tullow expects to report pretax impairments and exploration
writeoffs of (around) $1.5 billion (c. $1.3 billion post tax),"
it said.
"Write-offs include Jethro, Joe and Carapa well costs in
Guyana as a result of drilling results and Kenya Block 12A,
Mauritania C3, PEL37 Namibia and Jamaica licence costs due to
the levels of planned future activity or licence exits."
After repeated delays for its East African projects, Tullow
said that its scheme to truck oil from its Kenyan inland fields
to the coast has been suspended due to damaged roads and that
there was no breakthrough in Uganda, where it is looking to
reduce its stake.
To shield against oil price fluctuations, Tullow has hedged
45,000 barrels per day (bpd) of its 2020 output with an average
floor price of $57.28 a barrel. For next year, it hedged 22,000
bpd at an average floor price of $52.80 a barrel.
Tullow shares shed 70% in the fourth quarter of 2019 on
production downgrades in Ghana, the oil quality found in a well
in the Orinduik block offshore Guyana and the disappointing size
of a well in its Guyanese Kanuku block.
Tullow, a partner of French oil major Total in
several projects, has forecast 2020 output to shrink to a
maximum of 80,000 bpd and fall again to around 70,000 bpd in
2021-2023. It is still looking for a replacement for its former
Chief Paul McDade, who stepped down last month.
Tullow's full-year results are due on March 12 and will
include updates on the review of its assets and management
structure.
(Reporting by Shadia Nasralla, editing by Louise Heavens)
Tullow Oil (TLW)
