Tullow Oil swung into a loss in 2023 after cutting the value of reserves in its flagship West African oilfield as its chief executive said the company would consider shareholder returns after 2025.
The oil exploration company today posted a $110m in loss after tax last year, compared with a profit after tax of $49m in 2022.
The loss surprised analysts at Jefferies who had forecast a profit of $257m for 2023.
Tullow booked some $435m in impairments and write-offs, including over $301m for reduced reserves at its TEN oilfield in Ghana amid investment delays.
Shares in the company fell about 3% in London trade to hit their lowest since June.
The company generated around $170m in free cash flow last year, ahead of the $150m guidance but below the $267m generated in 2022, and cut net debt to $1.61 billion from $1.86 billion in 2022.
"We've got an opportunity to invest both organic and inorganically within our portfolio, and also at the same time, start to consider shareholder returns in the post-2025 timeframe," said CEO Rahul Dhir told Reuters.
The Africa-focused oil producer expects to generate more than $600m in free cash flow in 2024 and 2025, as output grows from its newly expanded Jubilee oilfield in Ghana.
The company's market capitalisation stood at $410m as of March 6.
Tullow has pegged its working interest output in 2023 at around 62,700 barrels of oil equivalent per day (boe/d) and forecast 2024 production between 62,000 and 68,000 boe/d.
Its turnover declined to $1.63 billion, from $1.78 billion in 2022. Last year, its revenue would have been $139m higher without hedges.
The company expects $250m of capital expenditure in 2024, compared with $380m last year. About 60% of the capital costs this year will be allocated to Jubilee.
The company reiterated its guidance for $200-300m of free cash flow this year at the $80 a barrel level for crude, largely driven by the timing of revenue receipts for 18 to 19 cargoes lifted in Ghana during the year
