- Tullow aims to cut debt below $1 billion by focusing on mature assets in West Africa
- A $300 million sale in Gabon boosted investor confidence, with shares rising 7.6%
- CEO confident the Jubilee field will drive growth after meeting debt targets
Tullow Oil Plc plans to maximize production from its mature assets in West Africa this year as part of efforts to reduce its debt to below $1 billion.
The company has been steadily reducing its debt, which accumulated during its earlier, more aggressive exploration phase. Former CEO Rahul Dhir, who departed earlier this year, shifted the company’s focus to established assets in Ghana instead of large-scale exploration, aiming to improve the financial situation.
Tullow stated on Tuesday that its key goals for the upcoming year are to move forward with its refinancing strategy and enhance production at the Jubilee and TEN fields in Ghana. Production from some fields in 2024 underperformed, leading to annual profits that were significantly lower than analyst expectations.
However, investors reacted positively to a $300 million deal to sell assets in Gabon, announced on Monday. Tullow’s stock rose by up to 7.6%, with its bonds also increasing.
James Hosie, an equity analyst at Shore Capital, commented that the Gabon asset sale marks a crucial step in the company’s strategy to reduce its debt to under $1 billion and restructure its capital.
Although production in 2024 was lower compared to the previous year and is expected to continue declining, Tullow plans to drill two new wells at the Jubilee field starting in May to offset natural decline.
Interim CEO Richard Miller expressed confidence in the Jubilee field, stating that it will generate significant cash flow and provide growth opportunities once the debt target is achieved.
