Tullow Oil released a statement ahead of its 2023 full year results, highlighting its operational and financial performance in 2023 and outlining its outlook for 2024.
During 2023, Tullow achieved a full-year working interest production average of approximately 63,000 barrels of oil equivalent per day (kboe/d), which included around 6,000 kboe/d of Jubilee gas. The company said it successfully resolved water injection issues encountered at the Jubilee field during the year. Additionally, Tullow said it demonstrated excellent drilling performance by bringing four Jubilee producer and three Jubilee water injection wells online.
“The start-up of Jubilee South East represented a significant milestone, leading to a substantial increase in Jubilee production, surpassing 100,000 barrels of oil per day (kb/d),” Tullow outlined.
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In terms of financial performance, Tullow reported revenue of approximately US$1.6 billion, which included around US$140 million in hedge costs, at an average realized oil price (post-hedging) of US$77.50 per barrel. Its capital expenditure and decommissioning expenditure for the year amounted to approximately US$380 million and US$70 million, respectively.
Tullow’s underlying operating cash flow reached approximately US$800 million, with free cash flow amounting to around US$170 million, exceeding guidance. The company said it successfully reduced its net debt by approximately US$250 million, resulting in a year-end net debt of around US$1.6 billion and gearing of 1.4 times, ahead of the target of 1.5 times. Furthermore, Tullow also secured a new US$400 million debt facility with Glencore.
Looking ahead to 2024, Tullow anticipates its group working interest production to average between 62 to 68 kboe/d, including approximately seven kboe/d of gas. The company expects to bring five Jubilee wells (three producers and two water injectors) online during the year, concluding planned activities ahead of schedule with exceptional drilling performance.
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Later in 2024, Tullow and its joint venture partners plan to pause drilling activities in Ghana while existing well stock sustains production at Jubilee. Drilling is set to resume in 2025, with the procurement process for a new rig scheduled to commence in 2024. Additionally, activity in the non-operated portfolio will focus on infill drilling and an infrastructure-led exploration well at the Simba license.
Rahul Dhir, Chief Executive Officer of Tullow, expressed optimism about the company’s outlook for 2024, emphasizing Tullow’s track record of operational excellence and capital discipline.
“We are on track to deliver c.$600 million free cash flow over the next two years to achieve our stated target of c.$800 million of free cash flow from 2023 to 2025 at $80/bbl. The debt facility agreed with Glencore is a strong endorsement of our business plan and we have no material uncovered debt maturities until May 2026. At the same time our assets are expected to deliver production growth, while we continue to maintain our laser focus on operational excellence and capital discipline.”
Note* c.$ typically denotes an amount in US dollars (USD). The “c.” stands for “circa,” meaning “approximately” or “about,” so c.$1.6 billion would mean approximately $1.6 billion USD.
