Tullow cuts output target and its revenue forecasts

OIL explorer Tullow Oil slashed its full-year output target yesterday, and said revenue in the first half would slump by 23 per cent to £290m, as low oil prices hit the sector.

“The reduction is due to the lower sales volumes and most significantly the reduction in realised commodity prices during the first half of 2009,” the company said in a trading update.

The company reduced its full-year average production guidance to 58,000 barrels of oil per day (boepd) from 60,000 boepd.

“The forecast has been impacted by mixed results from infill wells in the UK, partly offset by higher production in Africa,” Tullow said.

Numis Securities said first-half production was short of its 62,000 boepd estimate.

Tullow said realised commodity prices were significantly below the 2008 levels.

The price of oil slumped to as low as $40 a barrel earlier this year, from highs of $150 a barrel last July, while gas prices have also dropped.

Shares in Tullow Oil fell 3 per cent to 864p.