Tullow Oil is exploring ways to fend off a potential cash crunch as the London-listed group reported a $1.3 billion loss after it was forced to write down $1.4 billion due to collapsing demand for oil.
Tullow has a market cap of $361m as of yesterday and $3 billion in debt.
It said it was looking at "various refinancing alternatives" and plans to hold a capital markets day later this year.
It warned that the process carried uncertainties that could risk its going concern status.
"Cash flow projections forecast a potential liquidity shortfall during the 18-month period relevant to the Liquidity Forecast Test in respect of the January 2021 RBL re-determination due to the maturity of the $650m Senior Notes due in April 2022," it said.
Tullow, which is cutting jobs and selling assets, said it is looking to refinance convertible bonds due next year or the senior notes due in 2022, amend its reserve-based lending (RBL) facility or raise cash from banks or other investors by January.
Reserve-based lending (RBL) is a type of credit afforded to oil and gas producers and which is typically reviewed twice a year.
Like other oil producers, Tullow has already received debt covenant waivers this year, but its finance chief Les Wood said Tullow did not take continued waivers for granted.
Tullow reported a half-year loss of $1.3 billion today, compared with a $103m profit last year, as it took an expected $1.4 billion writedown after it lowered its oil price outlook.
Tullow has untapped liquidity and around $500m in available cash.
It plans to spend around $365m on investments and decommissioning this year.
Tullow said it expects its 2020 cash flow to break even at current oil futures prices. It has hedged 60% of its sales this year at a floor price of $57 a barrel and 48% of next year's at a floor of $51 a barrel.
Tullow said it halted the sale of a portion of its Kenyan onshore oilfields pending a review, but is confident it will close the sale of its Ugandan assets for around $500m this year to France's Total.
The company, founded in the 1980s to tap into African oil and gas, suffered a series of technical difficulties and missed production targets, leading its chief executive to step down late last year.
It said in its results statement today that its half yearly revenues slipped to $731m from $872m the same time last year.
The oil company said that it produced an average 77,700 bopd in the first half of 2020, in line with expectations but down 10% on the same time last year.
It said its full year guidance has been updated to reflect recent strong performance in Ghana, offset by production curtailments in Gabon due to OPEC+ quotas being applied.
Overall, guidance for the full year is narrowed from 71-78,000 bopd to 73-77,000 bopd, with the mid-point forecast of 75,000 bopd maintained.
Rahul Dhir, the company's chief executive, said that despite the very tough conditions in the first half of this year, Tullow successfully delivered reliable production and major, sustainable reductions to its cost base.
The CEO also said the company is close to completing the important sale of its interests in Uganda.
"The quality of Tullow's assets remains robust. Since my arrival as CEO, we have been developing new plans for our business, with the support of our Joint Venture Partners and expert advisors," Rahul Dhir said.
"These plans will deliver enhanced value from our assets to benefit all our stakeholders including our host countries and investors. We will host a Capital Markets Day towards the end of 2020 at which we will update the market on these plans to deliver on Tullow's true potential," he added.
Tullow Oil also today announced the appointment of Mitch Ingram as an independent non-executive director of the company with immediate effect.
Mr Ingram has held senior positions at Occidental Petroleum, BG Group and, most recently, at Anardarko where he was a member of the group's executive committee.