StockMarketWire.com – Oil and gas company Tullow Oil plc forecast strong production growth on the back of a significant ramp-up at the Jubilee field offshore Ghana, saying 2011 was ‘another transformational year’.
In an interim management statement for the period since January 1 ahead of its AGM, Tullow said it had performed stronly in the year so far.
‘In Ghana, the Jubilee field production ramp-up is on track and our exploration and appraisal programmes there continue to deliver excellent results.
‘New basin-opening exploration campaigns have also commenced with the spudding of the Zaedyus well in French Guiana in March and the Montserrado well in Liberia is expected to spud in June.
‘Significant progress has been made in Uganda with the signing of agreements with the government, CNOOC and Total, allowing the new partnership to restart exploration and to accelerate the development of the basin.’
Following first oil at the end of 2010, gross production from the Jubilee field had increased to over 70,000 bopd from five wells and water and gas injection had begun.
Plateau production of 120,000 bopd was expected to be reached in July as the remaining four production wells were completed and brought on line.
Jubilee Phase 1A project planning work was at an advanced stage and a develpment plan would be submitted to the Ghana government, with work expected to start in 2012.
A development plan for Mahogany East was currently being discussed with the government.
Extensive exploratory appraisal activity in the Deepwater Tano licence had continued in 2011, focused on proving up the hydrocarbon resource potential of the Enyenra and Tweneboa fields. The Enyenra-2A appraisal well drilled in March had proved the field to be a major light oil discovery.
The forward programme included well tests on both fields and two additional Enyenra appraisal wells. Development planning work had continued in parallel with appraisal drilling and a combined development plan was expected to be submitted to the government at the beginning of 2012.
In Uganda, significant progress had been made towards completing the farm down and accelerating the development of the Lake Albert Rift Basin.
Tullow said completion of the Uganda transaction would enable the group to accelerate the basin development plan with CNOOC and Total and begin to realise the significant potential of the region.
‘Jubilee production revenues, together with the Uganda farm-down proceeds, mean that the group will have a very healthy balance sheet to fund significant exploration and development programmes and deliver future growth.’
Capital expenditure for 2011 was expected to be around $1.5bn. In April, Tullow increased its reserves-based lending facility by $500m to $3.0bn and said it now has total debt facilities of $3.65bn.
Net debt at April 30, before receipt of the Uganda farm-down proceeds, was about $2.1bn, with unutilised debt capacity of $900m.