Oil and gas group Tullow Oil said on Thursday it would reinstate its dividend for the first time since 2014 in a sign of ongoing recovery after years of financial pain.
The FTSE 250 company, which has focused on cutting costs and reducing debt in recent years, will pay an annual dividend of at least $100 million from 2019 for a yield of around 3 per cent.
“Tullow has made excellent operational and financial progress over the past 18 months,” said Paul McDade, Tullow chief executive.
“Having reached our target of being a balanced self-funding exploration and production business and having embedded cost discipline across the group, this is the right time to reinstate a dividend and focus on our plans for growth,” he added.
The company was hit hard by the oil price crash in 2014 and built up heavy debts as it was forced to press ahead with capital-intensive projects that were given the go-ahead before prices plummeted.
It returned to profit this year for the first time in three years and said it would resume frontier exploration.
Shares in Tullow finished up at 185.5p by close of trading.
– The Financial Times Limited
