LONDON (dpa-AFX) - Tullow Oil Plc. (TLW.L) Wednesday said it expects to generate $0.6 billion of pre-tax operating cash flow, before working capital, for the first half of 2017, higher than last year.
The increase is a result of insurance proceeds, contributions from TEN, and increased contributions from Jubilee.
The company expects to incur $0.6 billion pre-tax of non-cash impairment of property, plant, and equipment due to reduced oil price forecasts.
The capex guidance for the year has been revised to about $0.4 billion from about $0.5 billion. This change reflects a revision to prior year accruals in Ghana and lower forecast expenditure across the portfolio. The deferred consideration from the Uganda farm-down, once completed, would further reduce the overall Group capex for 2017 to c.$0.3 billion.
The company is scheduled to release its first-half results on July 26.
Regarding its production, Tullow said its first half 2017 West Africa oil production has performed in line with guidance, and is expected to average 81,400 bopd. In Europe, half year net production is expected to average 5,600 boepd.
West Africa working interest oil production full year guidance of between 78,000 and 85,000 bopd for 2017, including production-equivalent insurance payments, remains unchanged. Europe full year gas production guidance for 2017 is now expected to average between 5,500 and 6,000 boepd.
Paul Mcdade, chief executive, said, 'Tullow continues to make good progress despite tough market conditions. Our recent Rights Issue and free cash flow from our low cost, producing assets have resulted in a significant reduction in our debt and provided the Group with greater financial and operational flexibility. ... Financial discipline and efficient capital allocation will be a key focus of my tenure as CEO as we seek to deleverage the Company and return to growth even at low oil prices.'
Copyright RTT News/dpa-AFX