Tullow signs new licences in Peru, Côte d’Ivoire

In Peru, the company bought a 100 per cent stake in a five blocks from Perupetro and a 35 per cent interest in another licence from Karoon Gas Australia.

The London-listed firm said it was awarded a 90 per cent interest in two licences onshore Côte d’Ivoire, adding to its existing four onshore exploration licences.

In a trading update ahead of next month’s publication of its full-year results, Tullow gave a guidance on revenue of US$1.7 billion and gross profit of $800 million for 2017.

The group also expects to have generated $500 million of free cash flow, significantly exceeding the forecast at the start of the year.

The increase is primarily due to strong production performance, rigorous cost discipline and a rising oil price, Tullow said.

Tullow chief executive Paul McDade said: “Tullow delivered strong operational and financial performance in 2017 against the backdrop of continued industry volatility.

There was also material improvement in the group’s balance sheet, with significantly reduced gearing and an overall reduction in net debt of $1.3 billion, it said.

“Over 2018 we expect to continue this positive momentum. With our diverse low-cost assets and high-graded exploration portfolio, enhanced by recent licence additions in Côte d’Ivoire and Peru, we have a strong foundation to grow the business and further reduce our debt.”

Tullow’s West Africa 2017 oil production exceeded its expectations for the year averaging 89,100 barrels of oil per day (bopd). In Europe, working interest gas production performed in line with expectations with full year net production averaging 5,600 boepd.

In 2018, working interest oil production, including production-equivalent insurance payments, is expected to average between 82,000 and 90,000 bopd.

It gave an overall group production guidance, for both oil and gas, to between 86,000 and 95,000 boepd.