Tullow left counting cost of futile hunt for Suriname oil
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.