Independent producer Tullow Oil reported Wednesday that it had seen strong oil production from its West African operations during the first half as the company took action to "re-set" its business.
During the first six months of 2015, Tullow's West Africa working-interest oil production averaged 66,500 barrels per day. The firm said that, as a result of strong performance from its Jubilee field offshore Ghana, it was increasing its production guidance for West Africa to between 66,000 and 70,000 bopd from 63,000-to-68,000 bopd.
Tullow also reported that the TEN Project, also offshore Ghana, is continuing to make "excellent progress" and has remained within budget and on schedule for first oil in mid-2016.
Tullow Chief Executive Aidan Heavey commented in a company statement:
"We have taken a number of important steps to ensure that Tullow remains on a firm financial footing. This approach is paying off with good progress across the business in the first half of 2015. Our major oil producing assets in West Africa have performed strongly and we have upgraded our 2015 full year production forecast accordingly. The TEN Project remains within budget and on track for first oil in mid-2016.
"In East Africa, we are making steady progress towards project sanction with good appraisal and test results from our wells in Northern Kenya and strong support from the governments of Kenya and Uganda. Finally, we continue to build our inventory of exploration prospects to provide options when market conditions improve."
Total revenues produced by the company during the first half were lower at $0.8 billion, compared to $1.3 billion in 1H 2014. Meanwhile, gross profit was down at $0.3 billion (1H 2014: $0.7 billion).
Several analysts who follow the company at various London-based investment banks agreed that Tullow's update indicated a "solid" operation performance by the company. However, analysts at Panmure Gordon cautioned:
"Overall, this looks a positive statement from an operational point of view, but the impact of low oil prices on the Company’s overall financial position is obvious."
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