Tullow Oil PLC has announced an excellent operational and financial progress for the first half of the year as revenue is expected to hit $700 million with a realised oil price of $58 per barrel.

This is because its production fields in West Africa are performing well and have successfully started its drilling programme in Ghana.

According to the oil giant, group working interest production in the first half of 2021 averaged 61,200 barrels of oil per day (bopd), in line with expectations.

First half underlying operating cashflow is expected to be $200 million, whilst pre-financing cash flow for the same period is also expected to be $200 million with disposal proceeds largely offsetting capex (capital expenditure) and decommissioning spend.

As at 30th June 2021, net debt was expected to be $2.3 billion and liquidity headroom and free cash were expected to be $700 million. Capital expenditure for the first six months of the year was however estimated at $100 million.

Meanwhile, full year 2021 guidance has been revised to 55,000 – 61,000 bopd (from 60,000 – 66,000 bopd). The guidance reflects the sales of the Equatorial Guinea assets and the Dussafu Marin permit and first half delivery.

Commenting, Group Chief Executive Officer, Rahul Dhir, said “I am pleased to report that Tullow has made excellent operational and financial progress in the first half of 2021. Our producing fields in West Africa are performing well and we have successfully started our drilling programme in Ghana. This strong operational performance, combined with continued capital discipline, improved market conditions and asset sales in Gabon and Equatorial Guinea, supported our transformational debt refinancing. Tullow now has a strong financial footing and we are making very good progress in delivering on our highly cash generative business plan and continuing to reduce our debt.”

Ghana’s operations

In the first half of 2021, Jubilee gross production was slightly ahead of expectations, averaging 70,600 bopd (net 25,100 bopd).

TEN gross production averaged 37,000 bopd (net 17,400 bopd). Combined FPSO uptime was in excess of 98%.

The oil company also said improved gas offtake and increased water injection rates in Jubilee have been sustained, averaging between 110-130 mmscf/d and over 200 kbw/d, respectively.

It said the 2021 drilling campaign is progressing well as the first Jubilee producer (J-56) is now onstream with encouraging initial flow rates.

Exploration

In the emerging and maturing basins of Guyana, Suriname, Argentina and Côte d’Ivoire, Tullow said prospect maturation continues across the exploration portfolio to unlock value from the substantial prospective resources identified.

“Around the group’s producing assets in Ghana, Côte d’Ivoire and Gabon, the exploration team are maturing several near field and infrastructure-led opportunities as potential future drilling candidates.”