Tullow Oil downgraded its 2019 output guidance to 90,000-98,000 barrels of oil per day (bbl/d) due to problems at its Ghana fields and sees final go-aheads for its Uganda in the second half while its Kenya project timeline was “ambitious.”
“[Ghana] performance was below expectations due to gas compression constraints on Jubilee during February and a delay in completing the Enyenra-10 production well at the TEN Field. Both issues have now been resolved,” Tullow said on April 25.
The company had previously expected to produce between 93,000 and 101,000 bbl/d.
“The ~3 percent reduction in 2019 net production guidance provides a headline, but should not concern investors in our view,” Barclays said in a note.
With much focus on Tullow’s three-well drilling program offshore Guyana, this year is also crunch time for Tullow’s East African projects.
Final investment decisions for its Ugandan project had been planned around mid-year and Kenya by the end of the year, which Tullow called “an ambitious target” on April 25.
The shipment of a first cargo of Kenyan oil to test the market, which was originally planned in the first half as well, is expected to sail in the third quarter, Tullow said.
In Uganda, a $208 million payment after selling a stake in its onshore fields to Total in a so-called farm-down deal was delayed last year because the country asked for more tax on the deal than expected.
“These discussions are expected to conclude shortly and will enable completion of the farm-down,” Tullow said.
The company has reduced its debt from $3.1 billion at the end of 2018 to $3 billion at the end of March. It has hedged 56,000 bbl/d this year at a floor price of $56.40 per barrel and 31,000 bbl/d at $58.68 per barrel for 2020.
Recommended Reading
Dividends Declared in the Week of Sept. 9
2024-09-13 - Here is a compilation of dividends declared by select upstream and service and supply companies for third-quarter 2024.
Viper Energy Offers 10MM Shares to Help Pay for Permian Basin Acquisition
2024-09-12 - Viper Energy Inc., a Diamondback Energy subsidiary, will use anticipated proceeds of up to $476 million to help fund a $1.1 billion Midland Basin deal.
Kosmos to Repay Debt with $500MM Senior Notes Offer
2024-09-11 - Kosmos Energy’s offering will be used to fund a portion of its 7.125% senior notes due 2026, 7.750% senior notes due 2027 and 7.500% senior notes due 2028.
ONEOK Offers $7B in Notes to Fund EnLink, Medallion Midstream Deals
2024-09-11 - ONEOK intends to use the proceeds to fund its previously announced acquisition of Global Infrastructure Partners’ interest in midstream companies EnLink and Medallion.
Gulfport Releases Results on Senior Notes Offer Due 2026
2024-09-10 - As of the close of business on Sept. 9, the offer’s expiration date, Gulfport received tenders for an aggregate principal amount of approximately $524 million of the notes.