Tullow Oil and its Joint Venture Partners have announced plans to suspend drilling activities in Ghana later in 2024, relying on existing well stock to maintain production at the Jubilee and TEN fields as output declines. The decision comes as the company prepares to procure a new rig, with drilling expected to resume in 2025.
In a statement released ahead of the Group’s 2023 full-year results, scheduled for announcement on March 6, 2024, Tullow revealed that it expects five Jubilee wells—comprising three producers and two water injectors—to commence operations in 2024. This marks the conclusion of the drilling program’s activities, completing approximately six months ahead of schedule due to outstanding drilling performance.
Rahul Dhir, Chief Executive of Tullow, expressed confidence in the company’s trajectory, citing the successful execution of Tullow’s business plan in 2023 as a significant milestone. Dhir anticipates Tullow generating approximately $600 million of free cash flow over the next two years, contributing towards achieving its target of approximately $800 million of free cash flow from 2023 to 2025, with oil prices assumed at $80 per barrel.
Furthermore, Tullow highlighted the debt facility secured with Glencore as validation of its business plan, noting that there are no significant uncovered debt maturities until May 2026.
The company remains steadfast in its focus on leveraging its assets for production growth while emphasizing operational excellence and capital discipline.
As it suspends drilling activities temporarily, Tullow aims to optimize its existing resources to sustain production levels, demonstrating its commitment to prudent resource management amidst evolving market conditions.