Tullow Oil on track to deliver $600 million free cash flow over next 2 years

(Reuters) -West Africa-focused Tullow Oil said on Wednesday it was on track to deliver about $600 million free cash flow over the next two years to achieve its stated target of $800 million from 2023 to 2025, sending its shares about 8% higher.

The London-listed oil and gas explorer said the start-up of Jubilee South East offshore Ghana drove production and boosted 2023 cash flow ahead of its expectations, adding that the year-end net debt was reduced by about $250 million to $1.6 billion.

The energy firm said its 2023 working interest production averaged about 63 thousand barrels of oil equivalent per day (kboepd). It expects output to average between 62 and 68 kboepd in the 2024 fiscal year.

Jefferies analysts wrote in a note that Tullow’s production forecast was in line with their estimates, and the focus would likely turn to Ghana output expectations once a drilling break occurs after this year’s five-well Jubilee programme.

The London-listed company said it plans to spend about $250 million in 2024, with about 60% of the capital expenditure allocated to the Jubilee programme.

Shares in the company were up 7.7% at 32.52 pence as of 1337 GMT, topping the FTSE 250 index.

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich and Tasim Zahid)