Tullow’s revival still faces production challenges

Tullow Oil is to pay a dividend once more. But can it find the barrels to sustain its improving balance sheet?

Tullow Oil has maintained stronger cash flow, reduced its debt and now reinstated its dividend. But the bellwether African explorer faces challenges in securing fresh production from East Africa as it seeks to realise production growth ambitions. On 29 November, the company said it would pay dividends in 2019 for the first time since 2014. Tullow said it expected the ordinary dividend in any year would total no less than $100mn and that, in periods of "particularly strong free cash flow generation", the board would also consider making additional returns to shareholders. The move underscores an improved financial situation at Tullow, whose business was hit hard by falling revenues and limit