Africa-focused Tullow Oil said today that it was increasing the volume of oil it protects with hedging to 75% of the company's output for the next two years, with plans for a further 50% increase for a year beyond that.
The oil producer had previously hedged around 60% of its output one year into the future and 30% in the second year.
In a statement ahead of its virtual AGM today, Tullow's chief executive Rahul Dhir said that after a year of significant change, Tullow has emerged as a new company with a fundamentally different approach.
"We have shifted our focus away from exploration and development and long-cycle capital commitments to a production focused company with a robust, cash generative business plan," the CEO said.
Mr Dhir said the company has reduced its debt levels and have sold its interests in Uganda, Equatorial Guinea and the Dussafu Marin permit in Gabon, raising over $700m in proceeds.
"This asset sale programme puts us well on the way to realising about $1 billion over two years through assets sales and cost reductions," he added.
The company has also reducing its cost base and are delivering cost savings across the business including annual General and Administrative cash savings of $125m.
"We are becoming a performance focused organisation where every barrel matters and every dollar counts," the CEO stated.
Rahul Dhir also said that Tullow had simplified its capital structure and recently completed a comprehensive debt refinancing which gives the company the financial stability to deliver its business plan.
Set up in the 1980s to produce oil and gas in Africa, Tullow has historically focused on exploring discoveries, but the oil price collapse last year forced the company and its rivals to slash exploration budgets.
In May, Tullow emerged from a financial overhaul with a $1.8 billion bond sale and a new business plan under CEO Rahul Dhir.
Tullow also said today that it planned to drill four wells in 2021.
Its group production to the end of May was in line with its expectations and averaged about 62,000 barrels of oil per day.
