Africa-focused Tullow Oil cuts spending plans for the year, but still raising expectations for production for the year. Photo courtesy of Tullow Oil
Feb. 8 (UPI) -- Even with breakthroughs at some of West Africa's brightest spots for oil and gas, Tullow Oil said capital discipline is a priority for 2017.
Tullow published its results for full-year 2016, saying it ended the year with $1 billion in free cash. The company is one of the premier players in emerging West Africa and said its production for the year would likely average 78,000 barrels of oil per day at the low end, a marked increase from the previous year.
Tullow Chief Executive Aidan Heavey said in a statement that advancements in oil and gas projects in Ghana, the Tweneboa, Enyenra, Ntomme complex, on time and on budget was one of the high points for 2016. That production milestone, alongside other West African breakthroughs, yielded positive cash flow for Tullow, though headwinds remain.
"As we focus our free cash flow primarily on reducing our debt, capital discipline remains critical," he said.
Spending last year for Tullow was $900 million and the forecast for capital expenditures this year is lower by more than 40 percent.
Tullow's operations at the offshore Jubilee oil field, one of its more promising holdings, were restricted last year by technical issues at a gas compression system. In early April, part of a floating production storage and offloading facility positioned off the Ghanaian coast was damaged, impeding its function.
The company's full-year 2016 revenue of $1.3 billion was 21 percent lower year-on-year, though its losses improved considerably over 2015.
Heavey, who is stepping aside, said that's an indication the company was starting to turn the financial corner as the broader energy market recovers.
"As I move to become chairman of the group and hand over to Paul McDade, Tullow has the right assets and expertise to take full advantage of the opportunities ahead," he said.