Tullow Oil Plc the heavy hitting UK oil and gas group, said this morning that it had continued to perform very strongly in the first four months of 2010 and that the outlook for 2010 was very positive. It reported significant progress on its Ugandan pre-emption and farmdown, while the Jubilee Phase 1 development project remains on track for first oil in the fourth quarter and the Tweneboa-2 appraisal well has established Tweneboa as a major oil and gas-condensate field. The period also saw Tullow strengthen its balance sheet by completing a £925m equity placing. Shares in the company were up 2% at 1110p on the news.
Tullow, which is still headed by Aidan Heavey who founded the company back in 1985, spent much of the early part of 2010 agreeing a US$1.5bn deal with Heritage Oil to take up its pre-emption rights over a 50% stake in Blocks 1 and 3A in Uganda. With formal government approval expected shortly, the company has agreed farmdown deals with CNOOC and Total with will see each partner acquire a one third interest in the three blocks that Tullow controls in the region. In Block 2, the Kasamene-2 and Kasamene-3 appraisal wells were drilled in January and March respectively and successfully delineated the upside potential of the field.
In Ghana, Tullow said it was making considerable progress on the Phase 1 Jubilee development project where first oil remains on schedule for the fourth quarter of 2010. It said that the start of oil production would be a “landmark event” for the company, its partners and the people of Uganda. Once underway, production will be steadily ramped up to an expected plateau rate of 120,000 barrels of oil per day.
Also in Ghana, the Tweneboa-2 appraisal well in the Deep Water Tano licence proved Tweneboa to be a major oil and gas-condensate field. The potential of the field will be evaluated with an exploration and appraisal drilling campaign which is scheduled to commence in June.
Elsewhere, Tullow’s production operations in the rest of Africa performed in line with expectations and exploration drilling is either planned or underway on licences in Tanzania, Gabon, Liberia, Sierra Leone and Mauritania. In Europe, the group’s UK gas production was ahead of expectations after a well performance optimisation campaign on the Schooner and Ketch fields yielded excellent results.