Tullow Oil is to focus on its core assets in west Africa as part of a plan to boost cash generation and secure the troubled energy group’s future.
The company has told shareholders it expects to be able to generate $7bn of operating cash flow over the next decade. Of this, $2.7bn will be invested back into the company, predominantly on recovering as much as possible from the oilfields in Ghana.
The remaining $4bn will go towards servicing its $2.4bn of net debt and shareholder returns. There will also be a “rigorous” focus on costs, the company said on Wednesday.
Tullow expects to start a multi-well drilling programme in Ghana in the second quarter of next year. It believes it has plenty of scope for further production in the country. It has produced 400m barrels of oil from an estimated 2.9bn barrels from its assets there.
Tullow’s production this year has averaged 75,000 barrels per day.