Tullow Oil PLC said Monday that it has cut its production forecast for the near term after 2019 output fell significantly below expectations and Chief Executive Paul McDade has resigned with immediate effect.
The energy company TLW, +3.21% said that despite a solid financial performance, it expects net production in 2019 to average around 87,000 barrels of oil per day due largely to lower production from the TEN and Jubilee fields in Ghana. This compares with net production of 88,200 barrels per day in 2018.
Going forward, Tullow said that it expects 2020 group production to average between 70,000 barrels a day and 80,000 barrels a day, and for an average rate of around 70,000 barrels a day for the following three years.
In light of the new production forecasts, Tullow said that it will reassess the group’s cost base and future investment plans.
For 2020, the board expects the group to generate underlying free cash flow of at least $150 million at $60 a barrel after a capital investment of $350 million.
As a result, the board has decided to suspend its dividend.
For 2019, the group expects to deliver free cash flow of around $350 million with liquidity headroom in excess of $1.0 billion, it said.
The company said that by mutual agreement, Mr. McDade has resigned, and that the board has begun a process to find a new group chief executive.
The company also said that Dorothy Thompson has been appointed executive chairman on a temporary basis and that Executive Vice-President for East Africa and Non-Operated Mark MacFarlane has been appointed as chief operating officer in a non-board role.