30th Jun 2016 07:00
LONDON (Alliance News) - Tullow Oil PLC Thursday said production, commodity prices, revenue, cashflow and gross profit will all be lower in the first half of 2016 compared to a year earlier as the producer lowered its production guidance for the remainder of the year.
Tullow said full year net production from West Africa will now be in the range 62,000 to 68,000 barrels of oil per day compared to the original guidance to produce 73,000 to 80,000 barrels a day. Production from Europe is now expected to be 6,000 to 7,000 barrels per day.
The flagship Jubilee field, offshore Ghana, suffered from issues with the floating production, storage and offloading vessel in the first half which significantly impacted production in the period. West Africa production averaged 51,900 barrels per day compared to last year when production averaged 66,500 barrels a day.
Jubilee has recovered since then, and is now averaging gross 90,000 barrels of oil per day. Overall, full year net production from Jubilee should be around 74,000 barrels per day, of which 26,300 barrels will be net to Tullow.
"The group expects to continue producing from Jubilee at similar levels through the remainder of 2016 with the exception of short periods of reduced production to commence work on the long-term turret solution.
Europe production in the first half was also lower at 6,800 barrels per day from 8,100 barrels per day a year ago.
Tullow said sales were lower in the first half than in the previous year as a result of lower production levels, and that was exacerbated by lower prices. Tullow averaged USD61 per barrel in the period post-hedges, compared to USD71 a barrel last year.
Revenue in the first half if expected to be around USD500.0 million, a steep drop from around USD800.0 million last year whilst gross profit is expected to have fallen to USD200.0 million from USD300.0 million. Cashflows before working capital are forecast to be around USD200.0 million in the first half compared to USD500.0 million last year.
By Joshua Warner; [email protected]; @JoshAlliance
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