LONDON (dpa-AFX) - Shares of Tullow Oil plc (TLW.L) were losing around 60 percent in the morning trading in London after the company announced that its Chief Executive Officer Paul McDade resigned with immediate effect. Further, the company maintained fiscal 2019 production view, but said it sees weak production in fiscal 2020 as well as in years ahead, and also decided to scrap dividend.
In light of the new production forecasts, the company plans a thorough reassessment of its cost base and future investment plans. The company's planned actions include reducing capital expenditure, operating costs and corporate overheads.
In its production and financial update, Tullow Oil noted that CEO McDade and Exploration Director Angus McCoss have resigned from the Board of the company by mutual agreement and with immediate effect. The company said it has initiated a process to find a new Group Chief Executive.
On a temporary basis, Dorothy Thompson has been appointed as Executive Chair, while Mark MacFarlane, Executive Vice-President, East Africa and Non-Operated, has been appointed as Chief Operating Officer in a non-Board role. Les Wood continues as an Executive Director and Chief Financial Officer.
For fiscal 2019, the company continues to expect net production to average about 87,000 bopd. The company said the financial performance has been solid, but production performance has been significantly below expectations from its main producing assets, the TEN and Jubilee fields in Ghana.
Meanwhile, for fiscal 2020, Group production is expected to be average between 70,000 and 80,000 bopd. Group production for the following three years is expected to average around 70,000 bopd.
On the Jubilee field, these factors include significantly reduced offtake of gas by the Ghana National Gas Company which Tullow makes available at no cost, increased water cut on some wells, and lower facility uptime.
In London, Tullow Oil shares were trading at 56.88 pence, down 59.77 percent.
Copyright RTT News/dpa-AFX
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