Shares of Tullow Oil fell as much as 10% in London trade today after the West Africa-focused oil company cut its full year free cash flow view to $150-$200m from its previous estimate of $200-$300m.
In a trading update, the company said the reduced forecast was partly due to overdue payments from the government of Ghana and delays in its Jubilee field in the country.
Tullow said the final position within the revised range for 2024 will depend on realised prices of four cargos yet to price, progress on receipt of the overdue gas payments from the government of Ghana and working capital movements.
It added that year-end net debt is expected to be about $1.4 billion.
Tullow said its group production averaged 62 kboepd so far this year, including 6.5 kboepd of gas, which was in line with its earlier forecasts.
It said that Jubilee oil production averaged 89 kbopd to the end of October, below expectations mainly due to underperformance of the J69-P well as flagged previously, unplanned downtime at the GNGC onshore gas processing plant and periods of reduced water injection due to power outages.
But it said its TEN oil production has remained consistent, averaging 19 kbopd, which was above expectations, with Enyenra and Ntomme wells responding positively to both injection and production optimisation.
Rahul Dhir, Tullow's chief executive, said the company's cash generative business enables it to continue its deleveraging progress.
"This has been achieved despite underperformance at the Jubilee field, which has been offset in part by strong performance at TEN, lower capital intensity and a continued focus on cost management," the CEO said.
"We are well positioned to optimise our capital structure and look forward to progressing plans to address our remaining debt maturities," he added.
