Tullow Oil plans to cut a third of its staff to save about $20m, a source with direct knowledge of the matter has said.

This comes after the company was hit by weak output in Ghana, delays in East Africa and lower-than-hoped-for oil quality in Guyana. 

Tullow's shares rose by as much as 2.5% following the news, after losing 75% of their value since November. 

Industry sources have also said the Africa-focused firm aimed to sell its Kenya projects, once vaunted as an engine for growth. 

The latest savings initiative would reduce administration costs by about a fifth to $80m, shrinking Tullow's workforce to about 650 people, and would be accompanied by hiring freezes, the source said. 

Tullow's annual net administration costs including costs to its partners equate to $100m, less administration spending, the source said. 

A spokesman for Tullow confirmed that the company had started a consultation process, which precedes any job cuts. 

"Tullow estimates that the measures will deliver considerable savings and the group's workforce may reduce by approximately a third globally with potential office closures in Dublin and Cape Town among a number of measures to reduce costs and overheads," the spokesman said. 

Its Cape Town and Dublin offices are focused on exploration, an area where Tullow is halving spending to around $75m. It is also cancelling its $100m dividend plans. 

Across the group, about a third of senior management jobs would be cut, the source added. 

After a string of production downgrades, Tullow expects its production to shrink to 75,000 barrels per day (bpd) this year and to 70,000 bpd from 2021. 

Tullow has yet to announce a new chief executive after CEO Paul McDade resigned in December. 

The company's market capitalisation stood at around $900m as of last night's close while its debt pile was around $2.8 billion at the end of 2019. 

It targets free cash flow of $150m this year at an oil price of $60 a barrel. 

Benchmark Brent crude was trading around $55 today. 

Tullow has pushed back its full-year results to March 12, when further details of its restructuring are expected. 

Executive chair Dorothy Thompson has said the announcement of a new CEO might come after that date. 

The company's market capitalisation stood at around $900m as of last night's close while its debt pile was around $2.8 billion at the end of 2019. 

It targets free cash flow of $150m this year at an oil price of $60 a barrel. 

Benchmark Brent crude was trading around $55 today. 

Tullow has pushed back its full-year results to March 12, when further details of its restructuring are expected. 

Executive chair Dorothy Thompson has said the announcement of a new CEO might come after that date.