By Christian Moess Laursen

Shares in Tullow Oil plunged Thursday after the oil-and-gas company cut its free cash flow target months after it guided for a significant cash flow uplift in the second half-year.

Shares were down 11% at 20.38 pence in early morning trading in London. This widens the year-to-date loss to 48%.

The West Africa-focused hydrocarbon producer said it now expects free cash flow for the year of between $150 million and $200 million, down from its previous guidance of between $200 million and $300 million.

This downgrade is due to overdue gas payments from the Ghanaian government and the delay to a lifting from the Jubilee field, offshore Ghana. Liftings refer to the process of moving offshore-produced hydrocarbons from a floating storage unit to another oceangoing vessel.

According to a Peel Hunt note, the lifting--now expected in early January--would help Tullow garner around $70 million, while the overdue gas payments are estimated at $40 million.

In August, it said it expected a significant uplift in cash flow in the second half of the year.

Lower oil prices also likely drove the downgrade as the previous guidance was based on $80 a barrel, while Brent crude-oil price currently sits at $72.12 a barrel.

Write to Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

November 28, 2024 04:53 ET (09:53 GMT)

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