West Africa-focused Tullow Oil expects its 2021 free cashflow to come in higher than previously forecast at $250 million and expects this year's cash flow to come in at $100 million at an oil price of $75 a barrel, it said today in a trading statement.
Tullow, with a market capitalisation of around $1 billion as of Tuesday, is focusing on reducing its $2.1 billion debt pile and has hedged 50%-75% of its output of around 60,000 barrels of oil equivalent per day between $51 and $78 a barrel to 2024.
The hedging cost is between $1.6 and $2 per barrel, it said.
Benchmark crude oil futures LCOc1 are trading near $90 a barrel, with much of last year's third quarter above $80. Tullow had said in November it saw its 2021 free cashflow at $100 million.
"(2021) free cash flow is expected to be c.$250 million, ahead of guidance, driven by continued focus on costs, supportive oil prices in the latter parts of 2021 and favourable working capital movements," Tullow said in the statement.
It is due to report full-year results on 9 March.
Tullow is seeking new investors for its yet to be developed projects in Guyana and Kenya, having submitted a revamped $3.4 billion development plan for some of its onshore Kenyan oilfields last month, it said.