Gulf Oil and Gas accountACCOUNT

Tullow Oil – 2020 Capital Markets Day

Source: www.gulfoilandgas.com 11/25/2020, Location: Africa

- New strategy and plan to generate c. $7 billion of operating cashflow over the next 10 years
- Plan focuses over 90% of future capital expenditure on Tullow’s West African producing assets
- Investment of c. $2.7 billion from 2021-30 delivers c. $4 billion cash flow for debt service and value growth
- 2020 Group production averages 75,000 bopd to date; Full Year guidance remains 73,000 to 77,000 bopd

Tullow Oil plc will be holding a Capital Markets Day from 9am GMT which will be hosted by Rahul Dhir, Chief Executive Officer; Les Wood, Chief Financial Officer; Wissam Al-Monthiry, Managing Director, Ghana; and Julia Ross, Director, People & Sustainability. Instructions for joining this virtual event can be found at the bottom of this release.

Significant value underpinned by a large resource base and focus on costs
During today's event, the team will present Tullow’s new strategy and plan which focuses on the substantial potential within Tullow’s large resource base associated with its producing assets where there is extensive infrastructure in place. In Ghana, for example, Tullow has produced just 400 million barrels of oil (gross) from 2.9 billion barrels of oil in place (c.14%). This plan, alongside a rigorous focus on costs, is expected to generate material cash flow over the next decade, which the Group anticipates will enable reduction of its current debt levels and deliver significant value for its host nations and investors.

The new plan will deliver production growth in the medium term and the ability to sustain production over the longer term. The first phase of investment will start in the second quarter of 2021 with the commencement of a multi-well drilling programme in Ghana.

Delivering high-margin, self-funded production and strong cash flows
Assuming an oil price of $45 per barrel in 2021 and $55 per barrel flat nominal from 2022 onwards, and with over 90% of future capital expenditure focused on the Group’s West African producing assets, Tullow forecasts it will generate c. $7 billion of operating cashflow over the next 10 years. After capital investment of c. $2.7 billion, there will be c.$4 billion cash flow available for debt service and shareholder returns which Tullow will initially apply towards reducing gearing to 1-2x net debt / EBITDAX while retaining appropriate liquidity.

Following the successful $575 million sale of its Ugandan assets, Tullow will continue to consider additional asset sales, provided they are value accretive and strengthen the balance sheet. However, in light of the material cost savings that the Group has realised and the cash flow generation from this new plan, there is now less urgency to sell additional assets.

Material options to generate additional returns
Tullow has considerable opportunities to unlock value in Kenya and South America. These require an innovative approach and a deep geoscience and engineering expertise but do not require significant capital investment in the evaluation phase.

In Kenya, Tullow is in the process of re-assessing Project Oil Kenya to design an economic project at low oil prices whilst preserving the phased development concept.

In South America, Tullow has material positions in emerging basins with substantial acreage in Suriname, Guyana and Argentina. Tullow’s current focus is to better understand the prospectivity in these basins.

Operational Update
Group working interest production to date in 2020 has averaged 75,000 bopd in line with expectations. Full year guidance remains 73,000 to 77,000 bopd, reflecting continued good performance across the portfolio.

In Kenya, Tullow and its Joint Venture Partners are working with the Government on an extension to their exploration licences to the end of 2021.

In Suriname, the prospective Goliathberg-Voltzberg North-1 well is on schedule to spud in Q1 2021.

RAHUL DHIR, CHIEF EXECUTIVE OFFICER, TULLOW OIL PLC, COMMENTED TODAY:
"Since joining Tullow in July 2020 I have been deeply impressed by the strength of the Group's assets, especially in Ghana. Following hard work by our team, and with input from our partners and external experts, we have a clear strategy and plan for the next 10 years. The plan focuses our capital on a deep portfolio of short-cycle, high-return opportunities within our current producing asset base and will ensure that Tullow can meet its financial obligations and deliver material value for our host nations and investors.”

Investment News in Ghana >>

United Kingdom >>  1/15/2021 - Triple Point Energy Efficiency Infrastructure Company plc, a closed-ended investment company investing in a diverse portfolio of Energy Efficiency ass...
Australia >>  1/14/2021 - Joint media release with Deputy Prime Minister Michael McCormack, Assistant Minister for Road Safety and Freight Transport Scott Buchholz, Senator for...

Portugal >>  1/12/2021 - Savannah is pleased to announce that it has signed a Heads of Agreement ('HoA') with the major diversified Portuguese energy group, Galp Energia, SGPS...
Iran >>  1/11/2021 - The CEO of the National Iranian Oil Company said NIOC was planning to issue Rls. 20,000 bn worth of bonds to finance projects aimed at production enha...

Bolivia >>  1/8/2021 - Echo Energy, the Latin American focused energy company, is pleased to announce that it has signed a cooperation agreement with GTL International S.A. ...
Norway >>  1/4/2021 - Spirit Energy and the other licence partners have decided to invest about £260 million to improve recovery from the North Sea Statfjord East field.




Ghana Oil & Gas 1 >>  2 | 3 | 4 | 5 |

More News

Related Links

Gulf Oil and Gas
Copyright © 2020 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.