LONDON (Reuters) – Africa-focused oil producer Tullow Oil (TLW.L) reported an operating loss for the second consecutive year and further suspended its dividend payments on Wednesday as the sharp decline in oil prices has drastically reduced its income.
Tullow Oil said it made a full-year operating loss of $ 1.09 billion in 2015, a smaller loss than the $ 2 billion seen the previous year, but signalling one of the worst spells in the company’s history.
The oil producer said there was a risk, if oil prices remain low, that it may become non-compliant with its financial covenants by the end of the year.
It said it was able to cut annual capital expenditure to as low as $ 300 million in 2017, down from up to $ 1.1 billion planned for 2016, if market conditions do not improve.
(Reporting by Karolin Schaps, editing by Louise Heavens)
