Tullow Oil has rejected reports they are working to sell the company following recent operational challenges.
There have been reports that the oil exploration firm is open to receiving bids from potential buyers to help bail it out from the recent challenges that have hit business, which has made it difficult to meet its target for 2019.
But speaking to JoyBusiness’ George Wiafe after a media engagement in Accra on Friday, Executive Vice President and Managing Director of Tullow Oil, Kweku Awotwi Ghana maintained that there is nothing on the table.
He maintained that despite these challenges with not meeting projection target Tullow cannot be said to be in financial crises for it to consider this option.
Mr Awotwi, however, maintained that the has a fiduciary duty to shareholders to act in the best interests of their investment and must consider any viable offers.
He added that what its executive board chairperson and the board have maintained that Tullow remains an attractive investment proposition and will work to earn back investors trust.
Tullow Oil’s strong financial standing and outlook
The Executive Vice President of Tullow and Managing Director said they cannot be said to be in financial crisis, looking at its financial results.
Mr Awotwi added that a company that is in distress would not be providing 350 million dollars of free cash flow and even 150 million dollars free cash flow for 2020.
On its share price performance, Mr Awotwi noted that share price drop does not directly impact Tullow’s ability to fund its operations and commitments going forward.
He said investors have been reacting negatively to the news about the board changes due to concerns that Tullow’s debt and ability to pay back as well as credulity issues.
“But since Monday, we have completely re-set the expectations of the market,” Mr Awotwi added.
He also disclosed that they are working to bring out some liquidity on the Ghana Stock Exchange to bring about some excitements for its share price.
The Executive Vice President of the oil exploration firm in Ghana added that Tullow’s barrels in West Africa are profitable and will deliver over at least $150m in free cash flow in 2020; the group has also committed to investment capex around $350m in 2020 as well showing that we have the resources to invest
Dealing with Jubilee Gas export challenges
Mr Awotwi also announced that Tullow and GNPC are in discussions to increase the gas export and increase offtake anticipated as well.
Tullow has in recent times struggled for the Ghana National Gas Company to take its natural gas, a development that threatens its oil wells.
But he maintains that the government of Ghana is also creating more demand by relocating the power barge to the western region and switching to gas which would also help deal with this challenge.