30th Apr 2015 06:50
LONDON (Alliance News) - Tullow Oil PLC Thursday said revenue, costs and production all remained in line with expectations in the first quarter of 2015 and reiterated its capital expenditure and production guidance for the full year.
The FTSE 250 oil and gas company said revenue and cost of sales were on target in the first quarter of 2015, adding that the business is "well funded" with a current net debt of USD3.5 billion and unutilised debt facilities and free cash totalling USD2.3 billion.
The company added that its major simplification project is underway and on track to deliver USD500 million of savings over the next three years but added it will book a USD45 million one-off restructuring charge in the first half of 2015.
"Over the last six months Tullow has reset its business to deal with the fall in the oil price. We have increased our existing debt facilities, amended our banking covenants, suspended our dividend, refocused our capital on near term production and are making substantial cost savings across the group," said Aidan Heavey, chief executive of Tullow.
Tullow's average working interest production in the first quarter of 2015 was in line with expectations, with production from West Africa reaching 65,800 barrels of oil per day and 9,000 barrels of oil per day in Europe. Tullow said full-year production remains on track.
The company said its capital expenditure budget for 2015 remains unchanged at USD1.9 billion, whilst USD200 million will be spent on exploration which will include "high impact" wells in Norway, Kenya and Suriname.
Tullow also reiterated that the TEN Project is now over 55% complete with all 10 of the wells expected to be online at first oil already drilled. The project remains within budget and on schedule with first oil expected in mid-2016 following a tribunal's decision that the project can continue to move forward despite suspending any further exploration work in a disputed maritime area between Ghana and the Ivory Coast earlier in April.
"We are on track to deliver 100,000 barrels of oil per day net production from our West Africa portfolio in 2017 and are identifying exploration prospects to target as part of future drilling campaigns," said Heavey.
By Joshua Warner; [email protected]; @JoshAlliance
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