Tullow Oil Debt Down to $2.8 Bln

Tullow Oil forecast its net debt would drop to $2.8 billion by the end of the year and slightly raised its full-year free cash flow to $700 million, helped by trimming its capital expenditure.

The company had previously said it might reach free cash flow of about $650 million, but in a trading update on Thursday it reduced its investment bill to to $430 million for the year from $460 million.

Tullow also narrowed its production forecast for the year to between 89,300 barrels of oil equivalent per day (boepd) and 93,300 boepd. It had previously put the range at 89,000-95,000 boepd.

"We still hold the view that the absolute level of debt needs to reduce, but see a balance sheet in a much stronger place than in recent memory," JP Morgan said in a note.

"Important in 2019 will be repeating this year’s solid free cash flow generation by maintaining capital discipline."

Net debt had stood at $3.1 billion at the end of the first half of the year.

(Reporting by Shadia Nasralla Editing by David Goodman and Adrian Croft)