Africa-focused independent Tullow Oil is hoping to generate $800 million cash flow in the next two years on the back of an improved business model and a recent production boost from a key African asset.
The company’s chief executive Rahul Dhir said on Wednesday while revealing Tullow Oil’s half-yearly results that the company will now switch to “harvesting mode” as its business is set to generate $800 million of free cash flow between 2023 and 2025.
“This will enable us to further reduce our debt, put in place a sustainable capital structure and grow our business to create value for our investors, host nations and employees,” Dhir said.
Tullow posted revenues of $777 million in the first half of 2023, an almost 10% reduction on its top line as compared to the same period last year.
Profit after tax declined to $70 million, as compared to a post-tax profit of $264 million in the first half of 2022.
Tullow has “relentlessly focused on capital discipline, operational performance and appropriate investments” in its assets in recent years, said Dhir, who became chief executive in July 2020.
Sustained moves by the company have resulted in “a much-improved business, material debt reduction and most recently, the delivery of Jubilee South East which has substantially increased production”, he said.
During the first half of the year, the company noted that it delivered on its strategic priorities which included the “start-up of Jubilee South East project, with gross production from the Jubilee field surpassing 100,000 barrels per day,” and commercialisation of Ghana gas through interim gas agreement, leading to a new revenue stream for the company.