17th Dec 2019 17:42
(Alliance News) - Moody's Investor Service has said Tuesday it has downgraded Tullow Oil PLC's corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD.
The credit ratings agency also lowered the outlook to Negative from Stable.
Moody's said the downgrade of Tullow's ratings and change in outlook reflects management's recent downward revision of its forward-looking production guidance following a review of the production performance issues experienced by the group in 2019.
The significant downward revision in Tullow's projected production will lower its future cash generating and debt reduction capacity, Moody's said.
"This will in turn reduce the group's financial flexibility to grow and diversify its production profile in the future by developing its existing hydrocarbon resources in Africa and pursuing exploration activities," Moody's added.
The investment service said the negative outlook reflects the uncertainty of Tullow's future prospects ahead of the completion of the review of operations currently underway and the appointment of a new chief executive officer, following the resignation of CEO Paul McDade in early December.
Tullow shares closed 4.5% higher in London at 63.62 pence each on Tuesday.
By Loreta Juodagalvyte; [email protected]
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