Upbeat outlook for West African oil in 2018

London-listed Tullow Oil said total production from its assets in West Africa exceeded expectations and that momentum should carry through to 2018.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Jan. 10, 2018 at 5:51 AM
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Jan. 10 (UPI) -- Total crude oil production from the West African portfolio on average last year was better than expected, London-listed explorer Tullow Oil said Wednesday.

Tullow offered a preliminary view of its activities through Dec. 31, ahead of the Feb. 7 release of its full-year results. At the end of 2017, the company said it had $1 billion in free cash with no near-term debt maturities. It's expecting full-year revenue of $1.7 billion, which it credited to "rigorous" cost control mechanisms, the steady increase in crude oil prices and robust production from its West African portfolio.

"Tullow delivered strong operational and financial performance in 2017 against the backdrop of continued industry volatility," Chief Executive Paul McDade said in a statement. "Over 2018 we expect to continue this positive momentum."

For production, its net total output from its West African portfolio exceeded its expectation at around 89,100 barrels of oil per day.

The company is still in the process of remediating problems with a floating production facility parked over the Jubilee field off the coast of Ghana, considered one of the larger finds in recent years. Total production last year was 89,600 bpd, of which 35 percent went to Tullow. A series of planned shutdowns for maintenance are expected this year, and the company said it expects total production for 2018 will be lower by 15 percent.

At the Tweneboa, Enyenra, Ntomme complex offshore Ghana, output exceeded expectations last year with 56,000 bpd, with about half of that going to Tullow. International maritime disputes were settled in September and the company said it expects production at the TEN complex to ramp up this year.

Last week, the Ghanaian subsidiary of Tullow awarded a four-year contract to Danish rig company Maersk to use its Venturer floating drillship to help develop the Jubilee and TEN fields.

In December, Tullow doubled its portfolio offshore Ivory Coast after it took a 90 percent stake in two additional licenses.

Debt last year was reduced and the company said it expects total capital spending for 2018 will be around $460 million.

Tullow, which has its headquarters in London, posted a loss of around $519 million for the first half of 2017.

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