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Tullow Oil expects production will rise to 100,000 bopd in second half

"Tullow has made steady progress overall across the business in the first half of the year,” said chief executive Paul McDade.
oil and gas operations
Tullow’s forecast for 2019 production remains at 90,000 to 98,000 bopd.

Tullow Oil plc (LON:TLW) told investors that net production is expected to rise to 100,000 barrels of oil per day during the second half of 2019.

The oiler, in a trading update, said that output for the first half of the year is expected to average 89,000 bopd, including equivalent insurance payments, and it currently measures around 95,000 bopd.

Production rates are mainly being boosted by the addition of new wells in Ghana.

Tullow’s forecast for 2019’s average full year production remains at 90,000 to 98,000 bopd.

READ: Tullow Oil set to confirm US$100mln shareholder payouts

"Tullow has made steady progress overall across the business in the first half of the year,” said chief executive Paul McDade.

“Our balance sheet remains strong and we expect another year of solid free cash flow generation.

“I am particularly pleased with the significant progress we have made in Kenya and the agreement with the government over a number of key commercial principles will greatly assist us in driving the project to FID.”

Operationally, Tullow’s attention is also focussing on the delivery of an early production system for its onshore discoveries in Kenya – in May, output from the facility ramped up to 2,000 bopd from 600 bopd – and it is now anticipating a final investment decision in 2020 for a proposed larger development .

Meanwhile, for exploration, the attention is on an upcoming frontier drill programme offshore Guyana with targets in the same neighbourhood as Exxon’s multi-billion barrel finds.

In terms of financials, Tullow told investors that it expects to report revenue of around $900mln for the first half of the year and it anticipates US$500mln of gross profit.

Underlying free cash flow (before 2018 dividend payment) is forecast at around US$100mln for the first half, and US$450mln in the second half. Subsequent to the completion of the Uganda farm-out, the company expects the figure to increase to US$650mln.

Tullow said that revenue and cash flow generation is expected to be “heavily weighted” to the second half, because of its anticipated crude lifting schedule and phasing of tax payments and rebates.

It expects net debt will stand at US$3bn at the end of June.

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