Tullow Oil Plc will maximize extraction from its West African mature assets as part of its strategy to reduce its debt to less than $1 billion in 2025.
Richard Miller, interim Tullow CEO, stated this on Tuesday, according to a report published by Bloomberg.
Miller said that Tullow has absolute confidence in the Jubilee field to deliver material cash flows and provide the business with options for returns and growth, once our net debt target of below $1 billion is reached.
Tullow hopes that its refinancing plan and the optimization of production activities at Jubilee and TEN in Ghana are its top priorities for the upcoming year.
The 2024 annual profit was less than a quarter of average analyst projections due to disappointing output from several sectors.
Rahul Dhir, the former CEO, restructured the company earlier this year to concentrate on Ghana’s proven assets, rather than deep exploration, in an attempt to strengthen its finances. Dhir reduced net debt to $1.45 billion from $2.81 billion during his tenure.
However, in 2024, production fell short of the previous year and is expected to do so again.
Beginning in May, Tullow plans to drill two additional wells at the Jubilee deposit in an effort to slow down natural decline.
A $300 million deal to sell Gabon assets was revealed on Monday, which gave investors hope. Following the news, Tullow’s stock surged higher on Tuesday, reaching a peak of 7.6%. Bonds issued by the corporation also increased.
James Hosie, an equity analyst at Shore Capital, commented on the company’s approach saying:
“This marks another stage of delivery in management’s plan to reduce net debt towards a target of under $1 billion and refinance its capital structure.”
