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Tullow Oil Decreased Its 2019 Production Projection After Facing Technical Glitches

Tullow Oil decreased its 2019 production projection for the second time in three months as technical glitches in Ghana continued to cast a shadow.

The full-year output is now seen at 89,000 to 93,000 bpd, reflecting delays in well completion on the African country’s TEN venture, Tullow stated Wednesday. It’s a further setback for a company that depends on the continent for more than 90% of its revenue.

“The main issue is down to these last couple of wells at Enyenra, which have been quite complex from a completion point of view,” Chief Executive Officer Paul McDade mentioned in a cellphone interview. “We’re a bit dissatisfied this year because of these wells. However, we’ve received many wells to contribute subsequent year.”

The issues include mechanical issues in completing the Enyenra-14 production nicely, which has not been introduced on stream as deliberate and is currently suspended as the corporate continues a drilling program began last year. The troubles in Ghana triggered an earlier guidance downgrade in April when Tullow lower its 2019 forecast to as little as 90,000 bpd from as a lot as 101,000 bpd.

The shares dropped as a lot as 2.8% to 202.4 pence in London on Wednesday and traded at 203 pence as of 9:49 a.m. local time.

In East Africa, Tullow has additionally faced obstacles in getting several projects off the bottom. A final investment decision in Kenya isn’t expected until the second half of 2020, a deadline McDade mentioned is “sensible and achievable.”

Financial results have strengthened, with first-half net income leaping about 90% from a year earlier to $103 million, on the income of $872 million. Oil production averaged 88,700 bpd within the period.

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