Tullow Oil, the Irish-founded oil explorer, saw its shares slide on Thursday as the chief executive that had overseen a turnaround in its finances over the past four years plans to step down next year.
Rahul Dhir, who took over as chief executive in July 2020, plans to “pursue other business, academic and family interests”, the Africa-focused explorer said in a statement, adding that the date of his departure has yet to be determined. Group chairman Phuthuma Nhleko has started a process to find his successor.
Shares in Tullow were down 9.9 per cent in midafternoon trading in London.
“Since joining in 2020, Rahul has led a comprehensive turn-around and strategic reset of Tullow, focused on the delivery of operational and financial performance, debt reduction and positioning the company for future growth,” said Mr Nhleko,
Under Mr Dhir, Tullow delivered over $1.1 billion (€950 million) in free cash flow and reduced its net debt from $2.8 billion to about $1.4 billion.
Tullow’s net debt peaked at $4.8 billion at the end of 2016. The company saw its share price plunge about 85 per cent in the 18 months before Mr Dahir took charge, amid a series of drilling and production disappointments, exits of its then chief executive and exploration director, massive asset write-downs and warnings about potential cash shortfalls.
Asset sales and cost-cutting under its current chief executive – together with higher oil prices – had helped Tullow pull off a make-or-break $1.8 billion debt refinancing in 2021 and chip away at its debt mountain.
Tullow, which was founded by one-time Aer Lingus accountant Aidan Heavey in 1985, closed its Dublin office in 2020 as part of a round of corporate restructuring and quit the Irish stock market last year. It had moved its domicile to the UK two decades ago.
In a trading statement late last month, Tullow pushed its full-year production forecast to the bottom end of its previous guidance of between 62,000 and 68,000 barrels of oil equivalent per day, driven by an issue at a well in its key Jubilee oil field off the coast of Ghana.
The company has lowered free cashflow guidance for 2024 to $150 million to €200 million from $200 million to €300 million.
The original guidance was also based on a Brent oil price of $80 a barrel, where it currently trades at around $73.
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