Tullow Oil plc (LON:TLW) new chief executive Paul McDade has told investors that the company ‘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,” McDade said in an operations update for the six months to the end of June.
“Since I became CEO in April, I have reviewed our medium-term plans and remain satisfied that we are making the right investment decisions with regard to our producing, development and exploration portfolio.
“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."
Tullow reported that production in West Africa averaged 81,400 barrels per day (including production equivalent insurance payouts relating to the Jubilee field), while the group’s European assets averaged 5,600 boepd.
Guidance for the full year sees Tullow producing between 78,000 and 85,000 bopd from West Africa (including insurance payments) and between 5,500 and 6,000 boepd from Europe.
Ahead of half-year results, to be released on July 26, the company said revenue for the six months would be around US$800mln, up from US$500mln in the corresponding period of 2016.
The company anticipates a US$300mln gross profit, up from US$200mln, and US$600mln pre-tax operating cash flow, up from US$300mln.
Tullow ended the period with an estimated US$1.2bn of debt capacity and free cash.