LONDON (dpa-AFX) - Tullow Oil Plc. (TLW.L) said Wednesday that it expects to report revenue of about $1.7 billion and gross profit of about $0.8 billion for 2017.
The company also expects to have generated $0.5 billion of free cash flow, significantly exceeding the forecast at the start of the year. This increase is primarily due to strong production performance, rigorous cost discipline and a rising oil price.
Tullow Oil expects year-end net debt to be $3.5 billion, a reduction of over $1.3 billion over the course of the year.
In its trading statement for the year ended December 31, 2017, the company said its West Africa 2017 oil production exceeded expectations for the year averaging 89,100 bopd. In Europe, working interest gas production performed in line with expectations with full year net production averaging 5,600 boepd.
The company is slated to release full-year results on February 7.
Paul Mcdade, Chief Executive, said, 'Tullow delivered strong operational and financial performance in 2017 against the backdrop of continued industry volatility. The business is expected to generate free cash flow of $0.5 billion, above expectations, due to high levels of operated production and further progress on cost and capital efficiency. . Over 2018 we expect to continue this positive momentum.'
In 2018, working interest oil production, including production-equivalent insurance payments, is expected to average between 82,000 and 90,000 bopd. Working interest gas production is expected to average between 3,500 and 4,500 boepd. This brings overall Group production guidance, for both oil and gas, to between 86,000 and 95,000 boepd.
The company's 2018 capital expenditure associated with operating activities is expected to total approximately $460 million.
Tullow further said it is in the process of divesting its Pakistan assets and expects to complete this process in 2018.
Copyright RTT News/dpa-AFX