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Tullow Oil shares slump as CEO resigns, dividend scrapped

Tullow Oil shares slump as CEO resigns, dividend scrapped
FILE PHOTO: A worker walks at a Tullow Oil explorational drilling site in Lokichar, Turkana County, Kenya, February 8, 2018. REUTERS/Baz Ratner/File Photo   -   Copyright  Baz Ratner(Reuters)
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By Ron Bousso

LONDON (Reuters) – Tullow Oil <TLW.L> shares nearly halved on Monday after Chief Executive Officer Paul McDade stepped down and the energy company scrapped its dividend after failing to meet production targets due to weak performance by flagship assets in Ghana.

The company 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 Tullow to cut its estimates for 2019 oil output last month.

Tullow also suffered blows in recent months to its plans to develop oil fields in Uganda and Guyana.

Tullow’s head of exploration Angus McCoss also resigned on Monday.

Tullow shares were down 50% by 0827 GMT.

Tullow reset its production outlook. It is expected to produce 87,000 barrels of oil per day (bopd) this year, while 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 proper value.”

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,” Executive Chairman Dorothy Thompson said.

The London-listed company said it had started a process to find a new group chief executive.

(Additional reporting by Shanima A in Bengaluru; Editing by Rashmi Aich and Edmund Blair)

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