Poor performance by Tullow Oil in its markets have pushed the firm to slash its production guidance for the 2020 financial year
The poor performance has also led to the resignation of CEO Paul McDade and Exploration Director Angus McCoss from the Board of Tullow by mutual agreement and with immediate effect.
Executive Chair Dorothy Thompson noted that the board has been disappointed with the poor performance of the African assets.
“The Board has, however, been disappointed by the performance of Tullow’s business and now needs time to complete its thorough review of operations,” she said.
The London-listed firm saw its shares tank by more than 60 percent midday in Europe on Monday, after the Africa-focused oil explorer and producer slashed production guidance and suspended dividend amid poor production that forced its chief executive to step down with immediate effect.
Tullow Oil, which is active in Ghana, Kenya, and Uganda, has seen recently setbacks in its flagship projects in Africa.
In Ghana, production performance has been significantly below expectations from the Group’s main producing assets, the TEN and Jubilee fields, the company said in a statement today, slashing its production guidance for FY 2020 from the FY 2019 forecast.
The company saw a deal for an oil pipeline in Uganda fall through in September, as Tullow Oil, France’s Total, and China’s CNOOC terminated an agreement to sell part of Tullow’s stake in the Lake Albert project because “the Ugandan Revenue Authority and the Joint Venture Partners could not agree on the availability of tax relief for the consideration to be paid by Total and CNOOC as buyers.”
Tullow warned then that this setback would likely delay the final investment decision on the Uganda pipeline project, initially expected for 2019.
In Kenya, Tullow Oil also has to reach an FID on field production.
Considering the new production forecasts and the need to reassess the cost base and expected free cash flow, Tullow Oil’s board of directors decided to suspend dividends.
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