Tullow Oil shares rise on production outlook

Tullow Oil shares rise on production outlook

Shares in Tullow Oil jumped by a further 4% on the back of the company forecasting slightly higher production levels at a key asset in western Africa.

The Irish-founded exploration company - which paid shareholders a first dividend in five years last month - said it saw a strong performance from its Jubilee field offshore Ghana in the first half of the year, leading it to increase gross production forecasts for the field in 2019 to 95,000 barrels of oil per day (bopd) from a previous estimate of 93,000 bopd.

It also said drilling at new ventures in Guyana in South America is due to commence later this month.

Tullow is also continuing to seek new acreage in Africa and South America, where it recently won three licensing blocks offshore Argentina. The company has, however, pulled out from a licence in Mauritania.

In its latest trading update, Tullow kept 2019 production forecasts unchanged at 90,000-98,000 bopd. For the first half of this year, the company is forecasting revenues of around $900m (€790m) and gross profit of around $500m.

Both figures are in line with Tullow's first-half performance in 2018.

The company also said underlying free cash flow for the first half of the year - before May's dividend payment - would be around $100m and $450m for the full year.

"Tullow has made steady progress, overall, across the business in the first half of the year," said chief executive Paul McDade.

Tullow's share price was up by over 4% in Dublin and ahead 2.5% in London.

The stock has dropped around 7% in the past 12 months.

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