Tullow Oil plc's (LON:TLW) first-half results have brought a downgrade to full-year guidance, as a result of mechanical problems at the TEN operations offshore Ghana, while profits and cash flow is described as ‘robust’.
The oiler reported US$872mln of revenue for the six months ended 30 June 2019, with profit after tax of US$103mln and free cash flow of US$181mln.
It confirmed US$33mln of interim dividends, at 2.35 cents per share, and noted that net debt had reduced to US$1.9bn.
READ: Tullow Oil in June said production would reach 100,000 bopd in H2
In the first half the group’s assets in West Africa produced 88,700 barrels of oil per day net.
Tullow moved its full year production guidance to 89,000 to 93,000 bopd, down from 90,000 to 98,000 bopd. The downgrade to expectations reflects the delays in well completions at the TEN fields.
Operationally, the company continues to advance its development projects in Kenya and Uganda. At the same time, a high-impact three-well programme is underway offshore Guyana – with results from the first well, Jethro, expected next month.
Chief executive Paul McDade told investors that the first-half results “demonstrate strong financial delivery”.
“We are disappointed that a mechanical issue at our latest TEN well has caused us to reduce our 2019 production outlook; however, our overall portfolio of low-cost West African production continues to provide a solid financial base for the business, allowing the Group to invest for future growth, continue to reduce debt and pay dividends to shareholders,” he added.
“Elsewhere, our exciting three-well Guyana exploration campaign is now under way and I am particularly pleased to see the good progress being made in Kenya with the first ever lifting of East Africa crude expected in the coming months."
Tullow shares were down 2.3p or 1.1% in Wednesday’s opening deals to change hands at 205.9p.