11 Jan Tullow Oil turns over new leaf with higher cash flow and new exploration licences
Tullow Oil is likely to post an improved free cash flow figure for 2017 and announced the acquisition of new exploration licences as it looks to finally close the page on the recent resources sector crisis.
The UK-listed independent oil and gas company said it expects to report free cash flow of US$500 million for the year to end of December, a figure which Tullow says ‘significantly’ beats expectations.
Improving production and rising oil prices, which are currently teetering on the $70 a barrel mark, have helped deliver Tullow’s improved cash flow, which will allow it to continue paying off sums of debt that were built into the company during the depths of the oil price crash.
Net debt is expected to be $3.5 billion at the year end, a reduction of $1.3 billion over the course of 2017.
Meanwhile, the company will resume new exploration activity after a period of sustained cost-cutting measures was adopted over the last three years which saw new exploration shelved.
Tullow will explore waters off the coast of West Africa and South America, after securing six licences in offshore Peru and two in the Atlantic Ocean off the coast of Ivory Coast.
“We are getting back to exploration, which we are good at, but still with a focus on cost control,” said chief executive Paul McDade.