Africa-focused Tullow Oil on Wednesday cut its 2019 oil production and free cash flow forecast for the year because of ongoing problems at its Ghana fields, sending its shares 20% lower.
Tullow has been struggling with its operations in Ghana due to mechanical issues at its Jubilee field and a delay in completing a well at TEN offshore field.
The London-listed company now expects annual oil output to be 87,000 barrels of oil per day (bopd), down from an earlier forecast of 89-93,000 bopd.
The company had cut its overall production twice already this year and in July said it expected output guidance to be 90,000-94,000 barrels of oil equivalent per day. (Full Story)
With global oil prices stuck around $60 a barrel and production taking a hit, Tullow expects free cash flow in 2019 to be around $350 million, down from an earlier forecast of $400 million. It said it was still focussed on reducing debt.
The outlook for gross output at its Jubilee and TEN Fields in the West African country has been reduced for 2019 because of the mechanical issues.
The constrained water injection issue at Jubilee will return to full capacity by the end of this month, but enhancements to the gas handling system are planned for early 2020, Tullow said.