* Paul McDade to become CEO after AGM on April 26
* Founder Aidan Heavey to become chairman for maximum of 2
* 2016 revenue estimated to have fallen 19 pct to $1.3 bn
* TEN 2017 production lower than expected at 50,000 bpd
* Suriname drilling marks return of bold exploration - COO
(Adds details, CEO, COO, analyst comments)
By Karolin Schaps
LONDON, Jan 11 Tullow Oil's long-serving
CEO and founder Aidan Heavey is to step down in April and retire
within two years, the company said on Wednesday as it announced
lower than expected production for this year due to teething
issues at a new field.
The disappointing trading update sent the shares down around
3 percent in early dealings, erasing all the gains the stock had
made earlier this week on the back of a $900 million deal to
sell a stake in a Ugandan oil field to Total.
Heavey, who founded Tullow in 1985 and named it after the
Irish town where it was set up, will be replaced as CEO by Chief
Operating Officer Paul McDade after the company's annual general
meeting on April 26 when Heavey will become chairman for a
maximum of two years.
"When you're somebody who starts a business it is obviously
hard to pull back from it but you know yourself when you reach a
stage when it has to be done," Heavey told Reuters, adding he
would have left sooner if the oil market had not taken a
Analysts largely welcomed McDade's appointment, saying it
cleared up uncertainty about Heavey's future at the company.
"I'll bring a fresh approach to our strategy but you
shouldn't expect the whole strategy to change," McDade told
He will take over at a crucial time for Tullow, which
brought its multi-billion dollar TEN oil fields in Ghana on
stream just five months ago and now needs to turn costly
investments into profits.
The oil producer, like its peers, was hit hard by a collapse
in oil prices that was at its worst a year ago.
Tullow said on Wednesday 2016 full-year revenue is expected
to have fallen 19 percent year-on-year to $1.3 billion, with net
debt at $4.8 billion.
The company will publish full 2016 results on Feb. 8.
This year's West African production estimate has already
been scaled down to 78,000-85,000 barrels per day (bpd), with
the flagship TEN fields expected to contribute a
lower-than-expected 50,000 bpd due to problems with managing
pressure in one of the reservoirs.
Once at full capacity the fields will be able to produce
Tullow is also battling production issues at its Jubilee oil
field which will have to close for up to 12 weeks this year for
Tullow, fundamentally an exploration company, will bolster
its exploration campaign again this year after the weak market
forced the company to focus spending on more advanced projects.
This year, Tullow said it will drill in Kenya and
"It's about us getting back to bold, exciting and big
exploration," McDade said.
(Editing by Susan Thomas and Elaine Hardcastle)