“In light of current oil and gas sector challenges including the commodity price environment, we are reviewing our capital expenditure and our cost base to ensure that Tullow is well-positioned for future success.” the Chief Executive Officer of Tullow Oil, Aidan Heavey was quoted saying in the statement.
It was then anticipated that the group would announce its full year Trading Statement and Operational Update on 15 January 2015 and its full year results on 11 February 2015.
Indeed, as scheduled on 15th January 2015, Tullow announced its 2015 Trading Statement and Operational Update which reveals that Tullow is bound to make further cuts on its capital expenditures in 2015.
Commenting on the new development Tullow Boss Heavey said Tullow has already taken steps to strengthen its business to adapt to current market conditions.
“This work will continue during 2015 to ensure the Group is in a position to benefit when conditions improve.”
“In late 2014, we materially reduced our 2015 exploration capital expenditure and today announce a further cut to this expenditure to $200 million.”
He said Tullow will continue to carry out a review of the business to streamline processes and improve efficiencies which will result in significant long-term cost savings for the company.
According to a recent Bloomberg report, the plunge in oil prices has slashed more than half of Tullow Oil’s market value since June, 2014.
By January 12th 2015, Brent Crude, the European and de facto international benchmark, which started 2015 at $58 per barrel, was selling at $50.11, having recovered from its sub- $50 on January 7th 2015— the first time it sold below that mark since May, 2009. The US benchmark, West Texas Intermediate, began 2015 trading at $55 a barrel and by January 12th 2015, it sold for $48.36. By contrast on June 19, 2014 the cost of a barrel was ($115.71).