Tullow Oil raises outlook on higher output in West Africa

West Africa-focused Tullow Oil has lifted its 2017 production targets thanks to stronger-than-expected output from its flagship West African oil and gas fields.

The UK-based firm improved its 2017 output target to 85,000-89,000 barrels of oil equivalent per day (boepd), up from a previous 78,000-85,000 boepd, including production-equivalent insurance payments.

Tullow also slashed its 2017 spending target by a quarter to US$300 million as a result of lower expenses in East Africa and cut its debt to $3.6 billion while increasing free cashflow to $400 million.

However, the company remained cautious with regards to its oil exploration business despite the recent rise in the oil price to above $60 a barrel, the highest figures seen in the industry for over three years.

“The offshore market is still depressed,” chief financial officer Les Wood told Reuters. “It will take a little bit of time in my expectation. People are waiting to see whether this rally solidifies and stays at this level.”

Tullow plans to continue its recent cost-saving strategy next year, but will begin exploring in Suriname, Guyana and Jamaica, according to Wood.