Shares in Tullow Oil more than halved yesterday as chief executive Paul McDade stepped down, as well as the company’s exploration director Angus McCoss.
The energy company also
scrapped its dividend after failing to meet production targets due to weak
performance by flagship assets in Ghana.
Tullow has been plagued by
technical problems at its Jubilee field in Ghana and a delay in completing a
well at the TEN offshore field, which led the company to cut its estimates for
2019 oil output last month.
Tullow also suffered blows
in recent months due to setbacks at East Africa projects in Uganda and Kenya,
as well as to its plans to develop oil fields in Guyana.
Its shares had slumped by
60 per cent in London trade Monday morning.
Tullow today also reset
its production outlook and is expected to produce 87,000 barrels of oil per day
(bopd) this year.
It also forecast lower
production in 2020 of between 70,000 and 80,000 bopd, as it undertook a review
of its production performance issues.
In a conference call, the
company said it was open to receiving offers to acquire the company at the
The Africa-focused oil
firm also suspended its dividend as it aimed to generate more cash to support
future investment plans and current explorations.
“The board has,
however, been disappointed by the performance of Tullow’s business and now
needs time to complete its thorough review of operations,” its executive
chairman, Dorothy Thompson, said.
Its Chief Financial Officer,
Les Wood, said Tullow remained “comfortable” with its covenants with
banks and the London-listed company said it had started a process to find a new
group Chief Executive.
Cantor Fitzgerald Europe
described the difficulties the company announced as “a bit of a kitchen
“Investors may well agree that a reset is the correct approach, although that is unlikely to prevent another huge sell-off today,” the financial services company said in a note.