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Tullow Oil, in collaboration with its Joint Venture Partners, is gearing up to temporarily cease drilling operations in Ghana later this year. The decision comes as the company plans to rely on existing well resources to maintain production levels at the Jubilee and TEN fields amidst declining output.
Scheduled for 2024, the pause in drilling activities is part of a strategic move, with plans to resume operations in 2025 after initiating a procurement process for a new rig later this year.
In anticipation of the upcoming release of the group’s full-year results for 2023, scheduled for March 6, 2024, Tullow has disclosed that five Jubilee wells, comprising three producers and two water injectors, are expected to become operational in 2024. This development signifies the completion of drilling program activities, wrapping up approximately six months ahead of schedule due to exceptional drilling performance.
Rahul Dhir, the 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, aiming to achieve its target of around $800 million of free cash flow from 2023 to 2025, based on oil prices assumed at $80 per barrel.
Additionally, Tullow underscored the debt facility secured with Glencore as a validation of its business plan, with no significant uncovered debt maturities until May 2026. The company remains committed to leveraging its assets for production growth while prioritizing operational excellence and capital discipline.
