Tul­low left count­ing cost of fu­tile hunt for Suri­name oil

The Sunday Telegraph - Money & Business - - Business - By Jil­lian Am­brose

TUL­LOW Oil is pre­par­ing to lay bare the full im­pact of a fruit­less search for black gold on its long bat­tle against a stub­born pile of debt.

The ex­plorer will de­liver a trad­ing up­date on Wed­nes­day, a week af­ter ad­mit­ting its am­bi­tious South Amer­i­can project off the coast of Suri­name failed to strike oil.

The Araku project had been touted by an­a­lysts as one of the best oil prospects of 2017.

In­vestors had hoped the first well would boost rev­enues and help Tul­low pay down the debt. The com­pany’s bor- row­ing bur­den has al­ready forced a $750m (£574m) rights is­sue and a ma­jor fi­nan­cial re­struc­tur­ing.

Tul­low has strug­gled to re­cover from the mar­ket crash, even as oil prices have bro­ken back above $60 a bar­rel for the first time in two years. Its share price re­mains be­low 200p, well be­low the 300p its shares fetched in Jan­uary this year when oil prices av­er­aged $54.50 a bar­rel, and a frac­tion of its 850p price be­fore the oil price crash be­gan in late 2014.

Araku was the sec­ond ma­jor dis­ap­point­ment of the year for the group, which plunged to an un­ex­pect­edly deep half-year loss of $400m af­ter re­veal­ing a $650m write­down on its African oil as­sets.

Tul­low is ex­pected to end the year with net debt of $3.7bn.

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