StockMarketWire.com - Tullow Oil said it expected to report impairment charges and exploration write-offs of around $1.5bn after it lowered its oil price assumptions and reserves estimates.

The company, which also reiterated its recently-downgraded output expectations, said it had cut its long-term oil price assumption by $10 per barrel to $65 per barrel.

The $1.5bn pre-tax charge translated to around $1.3bn on a post-tax basis and would be recorded in Tullow's results for the year through December 2019.

Oil production for the year averaged 86,700 barrels of oil per day (bopd), which the company said was in line with its most recent forecast.

The company had downgraded its previous guidance due to technical issues and a reserves downgrade at its assets in Guyana, sparking the departure in December of previous chief executive Paul McDade.

Revenue in 2019 was $1.7bn, gross profit $0.7bn and free cash flow around $350m.

Production in 2020 was still expected to fall to between 70,000 to 80,000 bopd.

Tullow Oil said the recruitment of a new CEO was 'well under way with the assistance of an executive search firm'.

Executive chair Dorothy Thompson said the company had been working hard on a major review, focused on delivering a more efficient and effective organisation.

'The fundamentals of our business remain intact: recent reserves audits demonstrate that we have a solid underlying reserves and resources base in West and East Africa, our producing assets continue to generate good cash flow and we retain a high-quality exploration portfolio,' she said.

'The board and senior management are confident of the long-term potential of the portfolio and see meaningful opportunities to improve operational performance, reduce our cost base, deliver sustainable free cash flow and reduce our debt.' Story provided by StockMarketWire.com