LONDON (Reuters) - Tullow Oil’s (TLW.L) finance chief raised the prospect that the Africa-focused producer may resume its dividend, which it froze in 2015 due to the oil price crash.
“This year we’ll be maximising cash flow with a focus on strengthening the balance sheet.. and with our continued performance over the year that allows us to consider return to the shareholders,” Chief Financial Officer Les Wood told Reuters.
Tullow swung back into profit in 2017 after three years in the red.
It is set to generate around $500 million in free cash flow at oil prices around $60 a barrel, with every further $5 a barrel adding around $100 million in cash flow, Wood said. Benchmark Brent crude futures LCoc1 trade at around $74 a barrel [O/R].
Tullow is still considering how to divvy up that money between paying down its $3.4 billion debt pile, investing in assets or shareholder returns.
“We’re considering ... whether we’d use any of that oil incremental free cash flow to accelerate drilling in Ghana. We’ve not come to a conclusion on that,” Wood said. “That would really be accelerating production and cash flow particularly in 2019, more so than 2018.”
Reporting by Shadia Nasralla, editing by Louise Heavens