said today in
a trading update that it remains confident that it will add 200 million boe
(barrels of oil equivalent) to its resources this year - - as it has averaged
annually for the past six years - - and exit 2013 with oil production at record
levels. "Our high impact, basin opening exploration campaigns will continue in
2014, and with wells in Kenya, Mauritania, Norway, Ethiopia and Guinea planned
for the first half, there is much to look forward to."
Tullow confirmed that it had recommenced
operations in northern Kenya on November 8 after reaching a deal with local
leaders to prevent a repeat of protests that halted work last month. Residents
of the remote northern Turkana community, supported by a local politician,
marched on Tullow operations on October 26 to demand more jobs and other
The government said protesters looted one site,
which Tullow works on with partner Africa Oil.
Paul McDade, Tullow's chief operating officer, said the company had agreed to
"accelerate" training programmes and other community involvement schemes.
Gerry Hennigan of Goodbody commented
- - "Points of note within the Tullow Oil IMS this
morning, which covers the period to November 13th, relate to production, planned
asset disposals and forthcoming exploration activity.
Guided output for the year as a whole has been
maintained in the range 84 – 88 (GBS 86 kbopd). Production from Jubilee
(offshore Ghana) is expected to average 100 kbopd this year (GBS 97.5 kbopd) and
exit the year at 120 kbopd. Total field capacity is now indicated at 150 kbopd
on foot of new Phase 1A wells, underpinning potential future production. Aside
from FPSO capacity limitations (c.125 kbopd), the sole constraint to field
production would appear to be a delay in the gas export project to H2’14.
Bids for the farm-down on the TEN development
(offshore Ghana) are expected this month (Tullow’s 47% stake valued at $1.1bn in
our model). Elsewhere, the planned sale of its UK and Dutch interests is to be
re-structured and now involve part sales of the portfolio. On the exploration
front, as expected, bar an indication that the final well in the French Guiana
campaign (GM-ES-5) has been plugged and abandoned (- 4.1p) there is limited
incremental newsflow. Results are pending from Agete, onshore Kenya (30% risked
contribution to NAV of 10.7p) and Tultule, onshore Ethiopia (10% risked
contribution to NAV of 1.3p) by the end of the month with news on Fregate,
offshore Mauritania (10% risked contribution to NAV of 11.0p) anticipated in
In August, Tullow received $345.8m following the
court action against Heritage Oil. Net debt currently stands at $1.8bn, up from
$1.7bn at the end of June, and is well within our year-end forecast of $2.2bn.
Unutilised debt capacity stands at $2.5bn. Guidance on annual capex of $2.0bn
has been maintained.
With the primary driver of the Tullow share price - incremental exploration
newsflow from new frontiers - still pending, we expect the market reaction this
morning to be muted. That said, there are few negatives in the statement to
account for recent weakness, with the share price trading at a 16% discount to
our total risked NAV of £10.72 (PT of £12.85 set at a 20% premium). On the
contrary, positives in the statement relate to the stability of Jubilee
production (40% of forecast FY13, 46% of FY14 group production) and a resolution
to recent disruption in Kenya. Ahead of clarity on the emerging Kenya / Ethiopia
frontier potential we maintain our Buy recommendation."
Economic View: Tackling youth unemployment will be a slow process; Dermot
O'Leary, chief economist at Goodbody comments - - "Following efforts
kick-started during the Irish EU presidency earlier this year, leaders, social
ministers and EU officials met yesterday in Paris to discuss the important issue
of youth unemployment. It appears that the summit agreed on the urgency of the
situation but there was little in the way of new policies to address the issue.
Instead, the key elements of the €6bn plan agreed previously were reiterated. A
key pledge within this is to ensure that no one under 25 remains without work or
training for more than four months.
The goal of tackling youth unemployment is indeed
a laudable and necessary one, but youth unemployment has been an issue for
years, yet the youth guarantee scheme is not yet operational. Moreover, while
putting policies in place to reduce the chances of embedded structural
unemployment are necessary, an increase in demand in the euro area will also be
required to solve this particular problem. In this regard, it is interesting
that this debate is ongoing at the same time as the debate on the excessive
current account surplus in Germany and the effect that this is having on the
trajectory of the bloc as a whole.
Solving the youth unemployment issue is a very
important political issue for European leaders. The latest summit highlights
this fact, but with youth unemployment hovering at 24% and much higher in some
countries, the journey back to 'normal' will be a long one."
In New York Thursday, the
Dow is down 34 points or 0.22% to 15,713.
The S&P 500 slid 0.41% and
the Nasdaq slipped 0.99%.
The MSCI Asia Pacific Index
lost 0.9% Wednesday.
Japan's Nikkei 225 fell
0.15%; China's Shanghai Composite dropped 1.83%; South Korea's KOSPI dipped
1.60%; Australia's S&P/ASX 200 declined 1.37% and in Mumbai, the Bombay Stock
Exchange the S&P BSE India Sensex Index slid 0.43%.
In Europe, the
Dow Jones Stoxx Europe 600 is down
1.07% in mid-afternoon trade Wednesday.
In Dublin, the
ISEQ is off 1.03%
Tullow Oil has
fallen 2.56% in London.
Key Index Performance
Bank of Ireland Daily Report
The euro is
trading at $1.3444 and at £0.8411.
For live currency updates, check the
right-hand column of the
Finfacts home page.
The US dollar
fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry
a measure of shipping costs for dry commodities,
hit an all-time High of 11,771 on the 21st of May, 2008.
From that time it reversed and on the 5th of December, 2008 it hit a low of 663
- - close to a 1986 low.
On Thursday, July 15, 2010, the index fell for
the 35th straight session, by 9 points, or 3.11%, to 1,619 points,
the BDI fell 21 points or 1.34% to 1,543.
Global rebalancing — the tanker scrapyard index?
Crude oil for December 2013 delivery is
currently trading on the
Chicago York Mercantile Exchange (CME/Nymex)
at $93.25 up 21 cents from Tuesday's close. In London, Brent for December
delivery is trading on the
International Commodities Exchange at
$106.73. The North
Sea benchmark accounts for two-thirds of the global market.
Finfacts, July, 15, 2013:
US West Texas Intermediate oil benchmark jumps in
July - - margin between WTI and Brent
The spot price
of an oz of gold is trading on the
CME in Chicago at $1,275.30 up $4.1 from Tuesday's closing.
Gold had hit a
record high of $1,921.15 a troy ounce on Sept 06, 2011.
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