Tullow gushes over excellent start to the year

After a series of successful oil discoveries oil giant Tullow was sounding understandably pleased with itself in its interim management statement.

The group said it is confident of delivering further significant growth in 2012 after what it called an excellent start to the year.

West & North AfricaIn the year to date, production at the Jubilee field in Ghana has averaged around 67,000 barrels of oil per day (bopd) and cumulative production to date is now over 33m barrels.

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Gross production at the Jubilee field is expected to average between 70,000 and 90,000 bopd in 2012 and field capacity is expected to be reached in early 2013.

Production performance elsewhere in West & North Africa has been in line with expectations.

South & East AfricaIn Uganda, development planning is progressing through a number of integrated teams with Tullow's partners, and major production from the Lake Albert Basin is expected some 36 months after a plan for the basin-wide development is approved by the Government of Uganda. Concurrently, options are being considered to allow for the sale of small volumes of crude from well testing to industry, as well as some potential small scale power projects.

In Kenya, the group said it has made an excellent start to its Rift Basin exploration campaign with the discovery of over 100 metres of net light oil pay in the first exploration well, Ngamia-1 in Block 10BB.

Many leads and prospects over the group's 100,000 square kilometres acreage position have been identified and following this discovery, the outlook for further success has significantly improved, the group claimed.

Europe, South America & AsiaProduction in Europe has been on a par with expectations.

In South America, following the basin-opening Zaedyus discovery in French Guiana in September 2011, a drill-ship has been contracted by the joint venture to commence a comprehensive exploration and appraisal programme in June.

The first well will appraise the discovery made by Zaedyus-1 and explore for deeper objectives, followed by an exploration wildcat well.

Tullow has a 27.5% stake in the Zaedyus prospect. Royal Dutch Shell, with a 45% stake, is the operator of the field, while the rest of the project is controlled by French integrated oil company Total.

In South Asia, Bangora field production in Bangladesh has been limited to around 103m standard cubic feet of gas per day since the beginning of the year. A work-over of one of the wells is planned in the second quarter to bring production back to the plant capacity of 120m standard cubic feet per day.

Tullow is looking to get shot of its businesses in Asia.

FinancialsYear to date financials are in line with expectations, the board said, adding that capital expenditure for 2012 is expected to be in the region of US$2.0bn this year.

As of April 30th 2012, net debt is around $0.5bn and un-utilised debt capacity is about $2.7bn.

"Tullow is continuing to deliver outstanding results from its high impact, exploration-led growth strategy. The Uganda farm-down and strong production performance give Tullow a firm financial foundation to carry out its extensive work programmes in Africa and the Atlantic margins," the firm's interim management statement said.

JH