Tullow Oil eyes $800 million free cash flow by 2025
Tullow Oil plc, in its 2024 guidance, foresees a dynamic year marked by strategic initiatives and financial prudence. With an anticipated average group working interest production between 62 to 68 thousand barrels of oil equivalent per day (kboepd), inclusive of approximately 7 kboepd in gas, the company is poised for substantial growth.
Projected capital expenditure for 2024 stands at a noteworthy $250 million, distributed across key operational areas. Ghana takes the lion’s share with an allocation of around $160 million, followed by approximately $60 million on the non-operated portfolio, $10 million in Kenya, and $20 million dedicated to exploration activities.
The financial landscape further includes decommissioning spend of $50 million in the UK and Mauritania, with an additional $20 million provisioned for Ghana and Gabon. Cash taxes, estimated at $350 million at an assumed oil price of $80/bbl, are strategically weighted toward the first half of the year.
Tullow’s financial outlook includes a forecasted free cash flow ranging from $200 to $300 million at the $80/bbl oil price, the variance influenced by the timing of revenue receipts from cargoes lifted in Ghana. The company anticipates year-end net debt to be less than $1.4 billion, maintaining a cash gearing of net debt to EBITDAX at approximately 1x at $80/bbl.
CEO Rahul Dhir emphasizes the company’s achievements in 2023, highlighting the start-up of Jubilee South East, the establishment of a new revenue stream from the sale of Ghana associated gas, and reserves growth in Gabon through license extensions. Dhir underscores Tullow’s commitment to operational excellence, capital efficiency, and growth investments, reiterating confidence in achieving the targeted $800 million free cash flow over the 2023 to 2025 period.
“In line with our strategy, we are continuing to focus relentlessly on operational excellence, capital efficiency and investments to drive growth. This strategy is delivering material cashflow generation and we are on track to deliver our target of c.$800 million free cash flow over the 2023 to 2025 period and optimise our capital structure,” he remarked.
Tullow Oil plc remains steadfast in its strategic vision, positioning itself to deliver value for investors, host nations, and stakeholders alike, buoyed by a robust foundation and a forward-looking approach to the future.
