28th Apr 2016 06:48
LONDON (Alliance News) - Tullow Oil PLC Thursday said production in the first quarter of the year was "marginally below expectations" due to the issues faced at the Jubilee field offshore Ghana, but said the field should resume production in a matter of days.
Production from its main Jubilee field was previously suspended due to a problem with the turret bearing on the floating production, storage and offloading vessel, but Tullow said new offtake procedures are being implemented which should lead to production resuming "in the next few days".
However, that resulted in production in the first quarter of 2016 coming in below expectations. Production from West Africa averaged 59,200 barrels of oil per day whilst production from its assets in Europe averaged 6,500 barrels of oil equivalent per day.
The problems at Jubilee mean full year production is "likely to be below current guidance" of 73,000 to 80,000 barrels of oil per day, and that guidance will be revised downward once the field is back up and running, the company said.
"However, Tullow does not currently expect this issue to have a material impact on future cash flow, due to the imminent resumption of production and appropriate insurance policies in place," said Tullow.
Elsewhere, Tullow's major TEN development in Ghana remains on track and is over 90.0% completed, with first oil expected sometime in July or August this year.
Net debt at the end of April is forecast to be USD4.50 billion whilst free cash, including debt capacity, expected to be USD1.30 billion.
Importantly, Tullow said it has revised its capital expenditure guidance for the full year down to USD1.00 billion from USD1.10 billion, and said further savings are expected during the year.
By Joshua Warner; [email protected]; @JoshAlliance
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