Africa-focused Tullow Oil strikes optimistic tone

Investments will continue off the coast of Ghana and focus will sharpen on developing prospects in Kenya, Africa-focused Tullow Oil said Wednesday.

At the end of 2017, the company said it had $1 billion in free cash with no near-term debt maturities. It's expecting continued growth because of the steady increase in crude oil prices and robust production from its West African portfolio.

The company is still in the process of remediating problems with a floating production facility parked over the Jubilee field off the coast of Ghana, considered one of the larger finds in recent years. The company said Wednesday it was in a good position for continued investments in Ghana and it could now focus on other parts of its portfolio.

"Strong production and disciplined cost management has allowed us to continue to both reduce debt and invest in our high-return production assets in Ghana," CEO Paul McDade said in a statement. "The assessment of the results from our appraisal campaign in Kenya also fully supports progress towards a major development of the South Lokichar basin."

A third-party review found reserves in the South Lokichar basin of an estimated gross of 766 million barrels of oil, a 24 percent increase from the previous estimate. Kenya aims to build the crude oil pipeline to the coast with the help of Tullow Oil and its partners.

Tullow said it's busy reviewing all of the data from the South Lokichar basin and plans to outline a plan for development possibly as early as this year.

At the Tweneboa, Enyenra, Ntomme complex offshore Ghana, output exceeded expectations last year with 56,000 barrels per day, with about half of that going to Tullow.

After struggling through the market downturn along with most of its peers, Tullow said Wednesday it managed to report a gross profit of $815 million. After posting capital expenditures of $225 million last year, the company said it was expecting $460 million this year.

Working interest production in West African averaged 89,100 barrels of oil per day. Tullow is expecting a range this year of between 82,000 and 90,000 barrels per day.

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