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Workers walk past storage tanks at Tullow Oil's Ngamia 8 drilling site in Lokichar, Kenya, on Feb. 8, 2018.

Baz Ratner/Reuters

A delay in receiving payment from the sale of a stake in Ugandan oil fields caused Tullow Oil to miss cash flow and debt forecasts on Wednesday, although the firm said it expected to receive the money soon and also forecast higher production.

The Africa-focused company said it expected production to grow to between 94,000 and 102,000 barrels of oil equivalent per day (boed) this year from 90,000 boed last year, as it increases output in Ghana.

Tullow had previously expected around $208 million from selling part of its stake in Ugandan oil fields to come in before the end of 2018, but the timeframe slipped, hitting its free cash flow and debt reduction plans.

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Free cash flow stood at $410 million. It had previously said its cash flow for 2018 could reach as much as $700 million. Crude oil prices slumped by more than a third in the second half of 2018 to below $50 a barrel.

“This has the potential to disappoint the market today; though as this cash should be received in (the first half of 2019) it is a transient issue,” JP Morgan said of the Uganda delay.

At 0825 GMT, Tullow shares were down 1.9 per cent at 196.37 pence.

The company’s net debt at the end of last year stood at $3.1 billion, higher than the $2.8 billion forecast.

Uganda’s energy minister said on Dec. 20 she had given Tullow conditional approval to sell part of its stake in Ugandan oil fields to France’s Total and China’s CNOOC , but only after $167 million of tax on the deal is paid – a view Tullow disagrees with.

“We’re in the final throes of discussion with Ugandan authorities to get the deal closed,” Tullow CEO Paul McDade said, adding he hoped to get it done in the first quarter.

Tullow said in November it would return to paying dividends, which it suspended in 2015 due to the oil price crash, and expects to pay out at least $100 million from 2019 with an option for a special dividend for this year.

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The company said it had hedged around 55,700 barrels of oil per day (bopd) at a floor of $56.24 a barrel this year.

Its 2020 hedging position locked in 25,000 bopd with an average floor price protected of $59.00 a barrel.

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