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Last Updated:
Apr 24, 2009 - 5:31:05 PM |
Tullow Oil says 2008 remains very positive with a programme of over 25 exploration wells to drill by year-end coupled with strong oil and gas pricing
By Finfacts Team
May 14, 2008 - 9:43:21 AM
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Tullow Oil plc today issued an Interim Management Statement prior to its Annual General Meeting which is being held at Stationers’ Hall in London, at 12 noon today. The company said that its business has reached a new level this year driven by the exceptional exploration and appraisal results in Ghana. With production in line with expectations, a programme of over 25 exploration wells to drill by year-end and optimism over strong oil and gas pricing continuing, the outlook for the remainder of 2008 is very positive.
Tullow said that its business has performed strongly in 2008 to date and has benefited from increasing oil and gas prices, while overall production performance was in line with expectations. The group has focused considerable financial and technical resources on exploration, appraisal and development projects, which in Ghana and Uganda have yielded outstanding results.
AFRICA
Ghana
Tullow says that significant progress has been made in delineating the Jubilee field and in the planning of a phased development project.
In March, Tullow was appointed Unit Operator for the Jubilee field development project and is targeting first oil from the field in 2010.
In May, the drilling of the Mahogany-2 appraisal well was completed, leading to a significant upgrade in the ultimate resource potential and anticipated recovery factor from the Jubilee field. A minimum of three further appraisal wells are planned for the remainder of 2008, with potential for further significant increases in field size.
Earlier in 2008 Tullow announced the successful drilling of the Odum exploration well in the West Cape Three Points licence; this discovery will require further appraisal in advance of any standalone development decision.
Uganda
Exploration activity in Uganda during 2008 has focused on the drilling of the Ngassa and Kingfisher wells and the commencement of a multi-well onshore drilling campaign in the Butiaba region of the Lake Albert Rift Basin. Tullow is also progressing plans for an Early Production System designed to produce first oil in 2009, and finalising arrangements for an offshore drilling programme scheduled to commence in early 2009.
Initial attempts to drill a highly deviated well to test the high-impact Ngassa prospect from a location on the lakeshore were unsuccessful and Tullow is now investigating alternative sites for drilling this well. In the interim, the rig has moved to Block 3A and is currently drilling the Kingfisher-2 well as planned.
The Butiaba area drilling programme commenced in April 2008 and the first well, Taitai-1, was announced as an oil and gas discovery on 13 May. The next well in the schedule, targeting the Lanya prospect, is expected to spud in late May.
Rest of Africa
Tullow said that production performance from Africa remains strong, driven by continued excellent production levels from the Ceiba and Okume Complex fields in Equatorial Guinea. All other fields have been performing in line with expectations.
In January 2008, the group announced that it had agreed the sale of its interest in the M’Boundi field in Congo Brazzaville to KNOC for a consideration of US$435 million.
Exploration and appraisal drilling activity in 2008, outside Ghana and Uganda, has been limited to Mauritania where the Khop exploration well was drilled in February and the Banda NW appraisal well completed in early May. The Khop well was unsuccessful, however, it provides important information for future Cretaceous prospects in the region. The Banda NW appraisal well successfully encountered the target Miocene reservoir and further appraisal work is planned to determine commercial potential.
EUROPE AND ASIA
Tullow’s UK gas business is performing in line with expectations and is benefiting from exceptionally strong gas pricing.
The company said that its business in Asia continues to perform in line with expectations. In Bangladesh, plans to upgrade the production capacity of the Bangora facilities remain on schedule, and Tullow has applied for an offshore block in the latest licensing round. In India, preparations for the commencement of drilling on the CB-ON/1 licence are ongoing with the first well expected to commence in June. The disposal of the group’s Pakistan business remains under active consideration.
SOUTH AMERICA
Activity within the Tullow’s South American portfolio has been focused on the conclusion of negotiations in respect of new licences in Trinidad. In French Guiana planning has commenced for the anticipated drilling of the Matamata prospect towards the end of 2008. A number of new venture opportunities are also under consideration.
FINANCING AND PORTFOLIO MANAGEMENT
Tullow said that its business is growing rapidly. In addition to unutilised bank lines, which continue to be in the order of $400 million, Tullow’s portfolio management efforts are expected to generate in excess of $550 million during 2008. These funds, in addition to the extremely positive underlying cash generation of the business, mean that Tullow is well placed to continue to fund its growth. Net Debt at 31 March was £478 million (before any disposal receipts).
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