The board of British oil producer Tullow (TLW.L) will pay an interim dividend of 2.35 cents per share, representing a payout of about $33 million, the company said on Wednesday, in line with plans to disburse at least $100 million a year.
The dividend follows a first half in which Africa-focused Tullow doubled post-tax profit to $103 million, and a payout of around $67 million earlier in the year. The group had suspended payouts in 2015.
But due to problems at its “TEN” group of fields off the coast of Ghana, Tullow downgraded its 2019 output guidance to 90,000-94,000 barrels of oil equivalent per day (boed).
In April, Tullow had cut its guidance to 90,000-98,000 from 93,000-101,000 barrels per day, excluding around 1,000 boed in gas production.
This is likely to bring down Tullow’s full-year free cash flow to around $400 million, $50 million below a previous forecast, Tullow’s Chief Financial Officer Les Wood told Reuters.
Tullow shares were down around 2.4% at 203.3 pence by 0933 GMT, underperforming the broader oil and gas index .SXEP. After having flagged delays for its East African onshore oil projects, Tullow said it now targets a final investment decision for its Kenyan onshore oilfields in the second half of 2020.
In Uganda, a tax dispute has delayed the payment of more than $200 million to Tullow after it sold part of a project to Total (TOTF.PA).
Tullow reiterated that it was “considering all options in pursuing the sale of its interests in Uganda”.
Tullow expects the first results from its drilling program off Guyana in the first half of next month.