Strong performance continues in 2008. Ghana and Uganda exploration and
appraisal yielding exceptional results.
LONDON, May 14 /PRNewswire/ -- Tullow Oil plc (Tullow) is issuing the
following Interim Management Statement, in accordance with reporting
requirements of the EU Transparency Directive, prior to its Annual General
Meeting which is being held at Stationers' Hall in London, at 12 noon
today.
Tullow's 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
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. The
Group has contracted the Eirik Raude drilling rig for a period of up to
five years, principally to undertake development and exploration drilling
in Ghana. This rig is expected to arrive in country during the fourth
quarter 2008.
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
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
Tullow's UK gas business is performing in line with expectations and is
benefiting from exceptionally strong gas pricing.
Within the CMS Area, activities have focused on portfolio management
and in March the Group announced the proposed disposal of a package of
assets, including undeveloped discoveries and exploration acreage, to
Venture Production for a total consideration of 35 million pounds Sterling.
Recognising the mature nature of the UK Southern North Sea and Tullow's
expertise in Carboniferous exploration, the Group has extended its acreage
position into the Dutch sector where more material prospectivity has been
identified.
In the Thames-Hewett area, the Doris exploration well spudded in March,
but did not encounter commercial quantities of gas. In a separate project,
Tullow is investigating the potential for utilising its existing
infrastructure in this area for longer term gas storage and carbon capture
applications.
SOUTH ASIA
The Group's 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 Group'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's business is growing rapidly and we are focused on maintaining
financial flexibility at all times. 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 our business, mean that Tullow is well placed to
continue to fund its growth. Net Debt at 31 March was 478 million pounds
(before any disposal receipts).
OUTLOOK
Tullow's 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.
Notes to Editors
Tullow is a leading independent oil & gas, exploration and production
group, quoted on the London and Irish Stock Exchanges (symbol: TLW) and is
a constituent of the FTSE 100 Index. The Group has interests in over 100
exploration and production licences across 23 countries and focuses on four
core areas: Europe, Africa, South Asia and South America.
Tullow's European interests are primarily focused on gas in the UK
Southern North Sea where it has significant interests in the
Caister-Murdoch System and the Thames-Hewett areas and operates over 70% of
its production. The Company also has offshore interests in the Netherlands
and Portugal.
In Africa, Tullow has exploration and production in Gabon, Cote
d'Ivoire, Mauritania and Equatorial Guinea and two large appraisal and
development programmes in Ghana and Uganda. Tullow also has exploration
interests in Mauritania, Senegal, Congo (DRC), Tanzania, Madagascar,
Namibia and Angola.
In South Asia, Tullow has exploration and production in Pakistan and
Bangladesh and high impact exploration activities in India.
In South America, Tullow has high impact exploration interests in
Trinidad and Tobago, French Guiana and Suriname.
For further information please refer to our website at
http://www.tullowoil.com
Disclaimer
This Interim Management Statement contains certain forward-looking
statements that are subject to the usual risk factors and uncertainties
associated with the oil and gas exploration and production business. Whilst
the Group believes the expectations reflected herein to be reasonable in
light of the information available to them at this time, the actual outcome
may be materially different owing to factors beyond the Group's control or
within the Group's control where, for example, the Group decides on a
change of plan or strategy. Accordingly no reliance may be placed on the
figures contained in such forward-looking statements.
Contact:
Aidan Heavey
Tom Hickey
Chris Perry
Tullow Oil plc
+ 44-20-8996-1000
- or -
Brian J. Rafferty
Taylor Rafferty
212-889-4350
SOURCE Tullow Oil plc
 back to top
Related links:
http://www.tullowoil.com
CONTACT:
Aidan Heavey, Tom Hickey or Chris Perry, all
of Tullow Oil plc, + 44-20-8996-1000; or Brian J. Rafferty,
Taylor Rafferty, +1-212-889-4350
|
