July 26 (UPI) -- London-listed Tullow Oil, which is focused heavily on Africa, said Wednesday it was cutting costs after seeing its realized oil price drop from last year.
The company, which has its headquarters in London, said it posted a loss of around $519 million for the first half of the year, after taking a pre-tax profit of $24 million during the same period last year. It reported an operating loss of $395 million, said its realized oil price of $57.30 per barrel for first half of the year was 6 percent lower than last year, but lowered its spending guidance for the year by 20 percent to $400 million.
"We continue to maintain strict cost discipline and now expect to deliver $650 million of cash-cost savings over three years, exceeding our original target by $150 million," Chief Financial Officer Les Wood said in a statement.
Wood was appointed as CFO in June after the former finance officer, Ian Springett, resigned from the post because of poor health. Wood joined Tullow in 2014 after working for nearly 30 years with British energy company BP.
Tullow is invested heavily offshore West Africa. The company said first-half production of around 81,400 barrels of oil equivalent per day was in line with its expectations. First quarter averaged 85,700 barrels of oil equivalent per day, though in February the company said its production for 2017 would likely average 78,000 barrels of oil per day at the low end, a marked increase from the previous year.
So far, the company has offered up for sale a greater stake in its operations in Uganda and worked to fix some of the production infrastructure offshore West Africa, which was hampered last year by equipment problems. At its Jubilee field off the coast of Ghana, the company said it aims to address equipment issues at a floating production vessel over the next two years
The company reported $642 million in impairments from property, plant and equipment for the first half of the year. Operationally, production was in line with its guidance and the company said it planned to reveal final investment decisions for its assets in Kenya later this year. Its plans to resubmit plans for Jubilee later this year were proceeding as planned.
"Despite continued challenging market conditions, Tullow performed well in the first half of 2017 delivering strong revenues and organic free cash flow," CEO Paul McDade said.
McDade served as chief operating office from 2004 to April, when he took over from Aidan Heavey, who founded the company in 1985.