Tul­low Oil re­turns to pay­ing div­i­dends

The Gulf Today - Business - - INTERNATIONAL -

LON­DON: Africa-fo­cused Tul­low Oil will re­turn to pay­ing div­i­dends, which it sus­pended in 2015 due to the oil price crash, and ex­pects to pay out at least $100 mil­lion from next year, with an op­tion for a spe­cial div­i­dend for this year, it said.

Tul­low 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 ear­lier this month, helped by trim­ming its cap­i­tal ex­pen­di­ture.

Tul­low has around 1.39 bil­lion out­stand­ing shares, ac­cord­ing to Refini­tiv Eikon data, im­ply­ing a div­i­dend of at least around $0.07 per share.

“Tul­low has made ex­cel­lent op­er­a­tional and fi­nan­cial progress over the past 18 months,” Chief Ex­ec­u­tive Paul Mcdade said in a state­ment on Thurs­day.

“Hav­ing reached our tar­get of be­ing a bal­anced self-fund­ing ex­plo­ration and pro­duc­tion busi­ness and hav­ing em­bed­ded cost dis­ci­pline across the group, this is the right time to re­in­state a div­i­dend and fo­cus on our plans for growth.”

The div­i­dend will be paid on a semi-an­nual ba­sis based on the free cash flow Tul­low makes while keep­ing debt and in­vest­ment in mind, it said, adding the board will look at other types of re­turns to share­hold­ers if cash abounds.

“With re­spect to the 2018 fi­nan­cial year, the board will re­view the po­ten­tial for a one-off or­di­nary div­i­dend after the year-end fi­nan­cial close,” Tul­low said. Tul­low, with a mar­ket cap of around 2.5 bil­lion pounds ($3.21 bil­lion), had raised the pos­si­bil­ity of re­turn­ing to pay­ing div­i­dends in April.

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