Tullow focuses on West African delivery
Tullow Oil is moving away from its focus on asset sales and has set out a long-term vision, under which it will generate $7 billion over the next 10 years. The new plan sees a focus on the company’s West African operations. Tullow will spend 90% of its capital expenditure on this region.
Tullow will be a “much more focused business”, CEO Rahul Dhir said on a conference call. The West African production has been somewhat overlooked by a desire to be “all things to all men”, he said. Work will be self funded and the company does not need to acquire additional assets.
In a case where oil prices are $45 per barrel in 2021 and $55 per barrel from 2022 onwards, the company’s West African assets will generate $7bn of operating cashflow. Minus capex of around $2.7bn, and Tullow has around $4bn to pay down debt and return cash to shareholders.
Net debt has been reduced to around $2.4bn. The company aims to cut this to $1-1.5bn. Capex will be flexible, with a range of $150mn to $450mn.
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