Tullow plans to invest US$ 300 million into Ghana in 2023 – out of the group investment of US$ 400 million, primarily in the Jubilee Field.
Investment in Ghana is expected to support production and free cash flow generation for the company, which will further reduce net debt and strengthen Tullow’s balance sheet. Over US$ 100 million of the amount will go into infrastructure.
Tullow, in an update to investors, indicated the planned expenditure figure represents an increase of US$ 50 million compared to 2022 as a consequence of deferrals from 2022, increased equity in Ghana for the full year, and ongoing infrastructure investment in Jubilee South East – which will account for about 40 percent of the Ghana capital spending in 2023.
“Capital investment in 2023, particularly in Ghana, is expected to support production growth through to 2025 and free cash flow generation of US$700-800million at US$80/bbl for the two years 2024 and 2025 based on 2P reserves only; which will further reduce net debt and strengthen Tullow’s balance sheet,” the update read in part.
Tullow mentioned that the additional equity in the Jubilee and TEN Fields acquired through the pre-emption transaction in Ghana for US$ 126 million had already been paid back by 31 December 2022.
The Group generated total revenue, including a hedging cost of US$ 1.7 billion, at a realized average oil price of US$102/bbl before hedging and US$87/bbl after hedging. Full-year capital expenditure was US$ 354 million, US$ 270 million in Ghana (of which US$ 107 million was in infrastructure). Decommissioning expenditure was US$72 million.