Tullow Oil expects to book an impairment charge of $1.5 billion, or $1.3 billion post-tax, primarily due to a $10/bbl reduction in long-term accounting oil price assumption and a reduction in reserves estimates, the company said Jan. 15.
The news was issued as part of a company update and guidance in advance of the group’s 2019 full year results.
Proven and probable reserves at the end of 2019 stood at 245 MMboe, down from 280 million boe a year earlier, the company said. Group working interest oil production averaged 86,700 b/d of oil in 2019.
Full year 2019 total revenue is expected to be $1.7 billion with gross profit of $700 million. Capital expenditure in 2019 was $490 million.
Capital expenditure in 2020 is expected to be $350 million, with an additional $100 million expected to be spent on decommissioning. The company said it expects to generate underlying free cash flow of at least $150 million from 75,000 b/d of oil at $60/bbl.
Group average production guidance for 2020 remains unchanged at 70,000-80,000 b/d of oil.
