(Reuters) - Africa-focused Tullow Oil Plc (L:TLW) slashed full-year spending budget and lowered the forecast for its oil production in West Africa, as it seeks to weather an oil price slump, while a delay in ramping up output at its multi-billion dollar TEN oil fields offshore Ghana also weighed on outlook.
Two years of weak oil prices has pressured the balance sheet of the company, which also faced a technical issue at its prized Jubilee field in Ghana that forced a recent month-long shutdown, besides system issues at TEN oil fields.
In response, Chief Executive Aidan Heavey has tightened spending, with capital expenditure down a quarter in the first half of the year.
Tullow said on Wednesday it had cut its 2016 capital expenditure budget to $900 million (724 million pounds) from $1 billion and said it expected 2017 expenditure to be in the range of $300 million to $500 million.
The company said it now expects to produce 64,000-67,000 barrels of oil equivalent per day (boepd) for the year in West Africa, down from its forecast of 62,000-68,000 boepd in June, due to the impact of reduced production from TEN oil fields.
Net debt was expected to be about $4.9 billion at the end of the year, as the company increased borrowing, mainly to fund investments in TEN, it said.
Year-to-date revenue and cost of sales were in line with expectations, it added.