The old adage, “When it rains it pours,” surely comes to mind when one considers the series of misfortunes UK oil major, Tullow Oil, has endured in the last few months.
On November,13, last, the company saw its share price take a hit by 27 percent after it became known to the stock market that its back-to-back discoveries in its Orinduik license offshore Guyana contained significant amounts of sulphur. It was therefore deemed heavy oil which is far less commercial than the light, sweet, crude in the Stabroek Block.
The oil major then faced unexpected production setbacks with its operations in Ghana. The Guyana Standard understands that poor well performance in that African nation left the company with no choice but to revise its 2020 projections from 87,000 barrels of oil per day to 70,000.
Tullow Oil also experienced troubles in getting operations in Kenya and Uganda off the ground, which resulted in the company cautioning shareholders that it will have to reassess its cost base as well as free cash flow projections.
The company then lost its Chief Executive Officer (CEO), and Exploration Director, Angus McCoss. They recently resigned on account of the poor performance. The Executive Board of Tullow Oil in a statement to the press, noted its disappointment, while emphasizing that a thorough review of operations would be conducted.
But before that could even complete, Tullow’s share price took a 62 percent hit. The London-based firm has since notified the stock market that it would have to suspend dividend payments.