{"id":14659,"date":"2025-01-31T09:07:51","date_gmt":"2025-01-31T09:07:51","guid":{"rendered":"https:\/\/www.oilnewskenya.com\/?p=14659"},"modified":"2025-01-31T09:07:57","modified_gmt":"2025-01-31T09:07:57","slug":"tullow-oil-to-focus-on-cost-efficiency-and-production-optimisation-in-2025","status":"publish","type":"post","link":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-to-focus-on-cost-efficiency-and-production-optimisation-in-2025\/","title":{"rendered":"Tullow Oil to Focus on Cost Efficiency and Production Optimisation\u00a0in 2025"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>2025 Outlook \u2013 Cost efficiency and production optimisation driving continued cash generation<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Operational<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Group working interest production expected to average between 50 to 55 kboepd, including c.6 kboepd of gas and inclusive of a two-week maintenance shutdown planned on the Jubilee field in the first half of the year, with a c.4% impact on Jubilee annual production.<\/li>\n\n\n\n<li>Water injection capacity on Jubilee was increased to 300 kbwpd late in 2024. Combined with an improvement in water injection system reliability, Tullow expects decline rates at Jubilee in 2025 to be lower than in the second half of 2024.<\/li>\n\n\n\n<li>A 4D seismic survey is underway across the Jubilee and TEN fields to identify future well locations, optimise the 2025-26 drill programme and develop a better picture of pressure and fluid movement in the reservoirs.<\/li>\n\n\n\n<li>Ghana drilling programme to commence in May 2025 with the Noble Venturer rig with two Jubilee wells (one producer and one injector) expected to come onstream in the third quarter of 2025. The rig will then undergo planned maintenance and restart drilling at the beginning of 2026, which will help drive an increase in production.<\/li>\n\n\n\n<li>Continued progress to maximise value from TEN, including focus on reducing the cost base to improve economics, and maturing further infill potential with the aid of 4D seismic data.<\/li>\n\n\n\n<li>In Gabon, the Falcon NE infrastructure led exploration (ILX) prospect on the DE8 licence will be drilled during the first half of the year.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Governance<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>As announced on 5 December 2024, Rahul Dhir will step down as Chief Executive Officer and resign from the Board during 2025. The process to find his successor is underway.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Financial<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Group is considering disposals of certain non-core assets in order to accelerate deleveraging to its target of net debt of below $1 billion and gearing of less than one times. Disposals will only be considered where the level of proceeds would be accretive to both equity and leverage.<\/li>\n\n\n\n<li>2025 capital expenditure of c.$250 million with c.60% allocated to Jubilee, c.30% to non-operated assets and c.10% to TEN, Kenya, and exploration and appraisal.<\/li>\n\n\n\n<li>Decommissioning spend of c.$15 million for UK; c.$15 million provisioning for Ghana and Gabon.<\/li>\n\n\n\n<li>Further cost base optimisation underway, with expected c.$10 million saving reducing annual cash net G&amp;A to c.$40 million.<\/li>\n\n\n\n<li>Cash taxes expected to be c.$200 million at $80\/bbl with payments weighted c.60% to the first half of the year.<\/li>\n\n\n\n<li>Hedge portfolio protects c.60% of forecast sales volumes at weighted average price of $59\/bbl through the year, with c.60% of sales volumes exposed to oil price upside and c.40% capped at a weighted average price of $89\/bbl.<\/li>\n\n\n\n<li>Forecast free cash flow of c.$200 million at $80\/bbl, including c.$50 million of overdue gas receipts in Ghana from 2024.<\/li>\n\n\n\n<li>Management plans to repay the 2025 Notes at maturity with a combination of cash in hand and drawings from the Glencore facility, and to refinance and simplify the Group\u2019s capital structure during the remainder of 2025.<\/li>\n\n\n\n<li>The Group intends to set out a framework for capital returns and growth through inorganic opportunities following completion of the refinancing and appointment of a new CEO<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>2024 Performance \u2013 Continued strong progress against business objectives<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Operational<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Full year working interest production averaged c.61.2 kboepd in 2024, including c.6.6 kboepd of gas.<\/li>\n\n\n\n<li>Production from Jubilee was 33.9 kbopd net (gross 87.0 kbopd), and TEN was 10.2 kbopd net (gross 18.5 kbopd).<\/li>\n\n\n\n<li>Production from the non-operated portfolio in Gabon and C\u00f4te d\u2019Ivoire was 10.6 kbopd net.<\/li>\n\n\n\n<li>Five new Jubilee wells (three producers and two water injectors) were brought onstream in 2024, bringing that drill programme to an end, approximately six months ahead of schedule and with no recordable safety incidents.<\/li>\n\n\n\n<li>Overall FPSO uptime at Jubilee and TEN averaged 97% in 2024.<\/li>\n\n\n\n<li>Decommissioning activities in Mauritania were accelerated and completed in 2024, ahead of schedule and below budget.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Financial<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Revenue of c.$1.5 billion (including c.$74 million hedge costs) at an average realised oil price (pre-hedging) of $80.2\/bbl.<\/li>\n\n\n\n<li>Capital and decommissioning expenditure of c.$230 million and c.$60 million respectively, in line with guidance.<\/li>\n\n\n\n<li>Underlying operating cash flow1 of c.$652 million and free cash flow of c.$156 million.<\/li>\n\n\n\n<li>Net debt reduced to c.$1.45 billion and gearing of c.1.3 times.<\/li>\n\n\n\n<li>Successful extension of the $250 million revolving credit facility to the end of June 2025.<\/li>\n\n\n\n<li>Successful resolution of the Ghana Branch Profits Remittance Tax arbitration, which removes $320 million contingent liability, and endorses the sanctity of our Petroleum Agreements.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Reserves and resources<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Independently audited 2P reserves at year end 2024 of 164.5 mmboe (212 mmboe at year end 2023), valued at c.$2.5 billion (NPV10).<\/li>\n\n\n\n<li>Reserves reduction includes 22.4 mmboe of Group production in 2024 and a revision on Jubilee, where the estimated quantum of oil-in-place remains unchanged.<\/li>\n\n\n\n<li>Upwards revision of TEN reserves, supported by substantial progress towards a material reduction in fixed costs, including in relation to the FPSO.<\/li>\n\n\n\n<li>In 2025, part of the Group\u2019s material 2C resources are expected to mature into 2P reserves with the support of the ongoing 4D seismic survey in Ghana and resulting identification of robust infill targets.<\/li>\n\n\n\n<li>The magnitude of the Group\u2019s estimated 2C resources (c.700 mmboe) reflects the material opportunity Tullow has ahead, to mature resources into reserves and sustain long-term production.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>2025 Outlook \u2013 Cost efficiency and production optimisation driving continued cash generation Operational Governance Financial 2024 Performance \u2013 Continued strong progress against business objectives Operational Financial Reserves and resources<\/p>\n","protected":false},"author":24,"featured_media":13411,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[7442,7443,11,7444],"tags":[10645,944,997,8393,1252,9198,2571],"class_list":["post-14659","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-countries","category-eastern-africa","category-top-news","category-west-africa","tag-cote-divoire-2","tag-gabon","tag-ghana","tag-jubilee-field","tag-kenya","tag-ten-field","tag-tullow-oil","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2023\/03\/Tullow-Oil.jpg?fit=713%2C476&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5JWkQ-3Or","jetpack-related-posts":[{"id":13936,"url":"https:\/\/www.oilnewskenya.com\/index.php\/ghana-tullow-oil-operational-update\/","url_meta":{"origin":14659,"position":0},"title":"GHANA: Tullow Oil Operational Update","author":"","date":"September 13, 2023","format":false,"excerpt":"Jubilee Gross oil production from the Jubilee field averaged 72.4 kbopd (net: 28.2 kbopd) in the first half of the year. This was slightly below expectations largely due to reduced water injection in late 2022 and into the first quarter of 2023, which has since been rectified in February 2023.\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2023\/09\/Tullow-Ghana-OVID.jpg?fit=450%2C600&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":14248,"url":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-provides-2023-operational-performance-2024-outlook\/","url_meta":{"origin":14659,"position":1},"title":"Tullow Oil Provides 2023 Operational Performance 2024 Outlook","author":"","date":"March 6, 2024","format":false,"excerpt":"Operational performance In 2023, full year working interest production averaged 62.7 kboepd, including 6.9 kboepd of gas. Group working interest production is expected to increase year-on-year and our guidance range for 2024 is 62-68 kboepd, including c.7 kboepd of gas production. Group working interest production (kboepd)FY 2023FY 2024 GuidanceGhana\u00a0oil42.648\u00a0 \u00a0Jubilee\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14183,"url":"https:\/\/www.oilnewskenya.com\/index.php\/ghana-tullow-oil-start-up-of-jubilee-south-east-drives-production-cash-flow-growth\/","url_meta":{"origin":14659,"position":2},"title":"GHANA: Tullow Oil Start-up of Jubilee South East Drives Production &#038; Cash Flow Growth","author":"","date":"January 24, 2024","format":false,"excerpt":"Operational Full year working interest production averaged c.63 kboepd in 2023, including c.6 kboepd of Jubilee gas. Water injection issues at Jubilee encountered in 2023, have now been resolved. Excellent drilling performance with four Jubilee producer and three Jubilee water injection wells brought onstream. Start-up of Jubilee South East marking\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/01\/Jubilee-Field.jpg?fit=560%2C315&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/01\/Jubilee-Field.jpg?fit=560%2C315&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2024\/01\/Jubilee-Field.jpg?fit=560%2C315&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":12436,"url":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-provides-july-trading-statement-operational-update\/","url_meta":{"origin":14659,"position":3},"title":"Tullow Oil Provides July Trading Statement &#038; Operational Update","author":"","date":"July 13, 2022","format":false,"excerpt":"Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented today: \u201cIt is two years since I joined Tullow and today, we are in a very different place. A relentless focus on costs, capital discipline and operating performance is ensuring delivery of our business plan. We have also added unhedged production\u2026","rel":"","context":"In &quot;Central Africa&quot;","block_context":{"text":"Central Africa","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/central-africa\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2019\/02\/Tullow-Oil.jpg?fit=713%2C476&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2019\/02\/Tullow-Oil.jpg?fit=713%2C476&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2019\/02\/Tullow-Oil.jpg?fit=713%2C476&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2019\/02\/Tullow-Oil.jpg?fit=713%2C476&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":11706,"url":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-to-concentrate-on-it-producing-assets-in-2022\/","url_meta":{"origin":14659,"position":4},"title":"Tullow Oil to Concentrate on it Producing Assets in 2022","author":"","date":"January 26, 2022","format":false,"excerpt":"2022 Outlook Group working interest oil production guidance is 55 to 61 kboepd. This forecast is based on Tullow\u2019s existing equity interests in TEN (47.175%) and Jubilee (35.48%) and will be adjusted following completion of the pre-emption of the sale of Occidental Petroleum\u2019s interest in Ghana to Kosmos Energy. The\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/08\/Tullow-Oil.jpg?fit=699%2C466&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/08\/Tullow-Oil.jpg?fit=699%2C466&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/08\/Tullow-Oil.jpg?fit=699%2C466&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":14781,"url":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-releases-2024-full-year-results-2025-outlook\/","url_meta":{"origin":14659,"position":5},"title":"Tullow Oil Releases 2024 Full Year Results 2025 Outlook","author":"","date":"March 25, 2025","format":false,"excerpt":"2024 FULL YEAR RESULTS Group working interest oil and gas production averaged 61.2 kboepd (2023: 62.7 kboepd). Revenue of $1,535 million (2023: $1,634 million), including $74 million hedge costs (2023: $139 million). Capital expenditure1\u00a0of $231 million (2023: $380 million) and decommissioning expenditure including cash provisioning for future decommissioning of $60\u2026","rel":"","context":"In \"drilling\"","block_context":{"text":"drilling","link":"https:\/\/www.oilnewskenya.com\/index.php\/tag\/drilling\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/14659","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/comments?post=14659"}],"version-history":[{"count":1,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/14659\/revisions"}],"predecessor-version":[{"id":14660,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/14659\/revisions\/14660"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media\/13411"}],"wp:attachment":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media?parent=14659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/categories?post=14659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/tags?post=14659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}