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Tullow Oil expects $500 million 2021 cashflow at $50/bbl oil price

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LONDON (Reuters) - West Africa-focused Tullow Oil said on Wednesday it expected to generate $500 million in operating cashflow this year at an oil price of $50 a barrel, which is around $15 a barrel below the current price.

Tullow reported 2020 operating cashflow of $598 million and an after-tax loss of $1.2 billion after writing off exploration assets and other impairments.

This year, Tullow expects to produce 60,000-66,000 barrels per day, down from 74,900 bpd last year after asset sales. As of end-2020, it had hedged 40,000 bpd of its 2021 output at a floor price of just over $48 a barrel.

After raising the spectre of a potential cash crunch in September, Tullow last month reached a deal with its banks to scale down its reserve-based loan, taking its liquidity to around $900 million.

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Talks with bondholders and banks continue and CEO Rahul Dhir said he expected to reach a deal with creditors to extend 2021 and 2022 maturities, rather than change the amount of debt, in the first half of this year.

With net debt of around $2.4 billion at the end of 2020, Tullow had a market capitalisation of around $1 billion as of Tuesday.

Tullow revamped its business last year to focus on squeezing its offshore fields in Ghana.

On Thursday it committed to becoming net carbon zero by 2030 in terms of greenhouse gas emissions from its own operations and the power it uses (Scope 1 and 2), including the use of forestation offset credits to amend for residual emissions.

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(Reporting by Shadia Nasralla; editing by Louise Heavens and Jason Neely)