Tullow Reports Strong Growth in 2005
At today's Annual General Meeting Tullow Chairman, Pat Plunkett, made the following statement:
During 2005, Tullow continued to report strong growth and financial performance. Over the last few years the Group has steadily developed a balanced exploration and production portfolio based on its three Core areas, each of which has both a rising production profile and significant exploration and development upside. The performance of our assets, combined with the ongoing strength of UK gas and global oil prices has allowed us to invest substantially in our business whilst simultaneously increasing returns to our shareholders in the form of dividends.
In the UK, Tullow's Southern Gas Basin ("SNS") business grew significantly in 2005. Key events during the year were the acquisition of the Schooner and Ketch assets, the completion of the operated Horne and Wren development and the drilling of 3 successful exploration wells. In 2006 we have brought on stream the first of our planned redevelopment wells on Schooner and Ketch and participated in two new exploration discoveries on the Humphrey and Cygnus prospects. These advances show that Tullow's focused approach can continue to deliver value in a mature basin such as the SNS.
Tullow's African oil interests also continue to perform well. During 2005, overall production in Africa rose to over 35,000 bopd and the Group achieved organic reserves replacement of over 200%, mainly through the exceptional performance of infill drilling programs in Gabon and Equatorial Guinea. 2006 will see first oil from important new developments including West Espoir in Cote d'Ivoire and Okume in Equatorial Guinea in addition to ongoing development and production enhancement work in Gabon and Congo (Brazzaville). Tullow continues its active exploration program in Africa, where, following three successful exploration wells to date in 2006, the ongoing exploration and appraisal of the Albertine Graben in Uganda has potential to establish a new world class oil province in this underexplored area. Preparations are also in progress for appraisal drilling to commence on the Kudu gas field in Namibia in early 2007 to test the significant additional reserve potential of the field.
In Asia, Tullow has interests in India, Pakistan and Bangladesh, and in each case the investments of 2005 are already showing returns. In Bangladesh, we are now producing 50 mmscfd from the Bangora-1 well, supplying important additional gas to the regional market. In addition, Tullow has embarked on an extensive appraisal program on the Bangora-Lalmai anticline, where material additional reserve potential has been identified. In Pakistan the fourth quarter of 2006 will see first gas from the Chachar development, while in India seismic operations on the CB-ON-1 Block are already providing significant encouragement for a multi-well drilling program in early 2007.
A more detailed review of operations will be provided in our pre-close period Trading Statement and Operational Update in July 2006.
In conjunction with the ongoing investment in our assets, Tullow has also continued to develop its staff, Board and Management. In March 2006 Paul Mc Dade, Chief Operating Officer, was appointed to the Board of Tullow and today I am delighted to announce the appointment of David Williams as a non-executive Director with effect from 1 June. David brings a wealth of public company experience to the Group from 15 years with Bunzl plc, the last 5 years as Finance Director and more recently as non-executive director of The Peninsular and Oriental Steam Navigation Company until its recent acquisition and George Wimpey plc, where he is the Senior Independent Director.
While we have been fortunate in attracting outstanding individuals to help the Group continue its growth, today also brings the retirement our Exploration Director, Adrian Nel, one of the most senior and respected explorers in our industry. While we are naturally sad to see Adrian go, and wish him well in his retirement, we are delighted that he has assisted us in identifying and recruiting his successor, Angus McCoss, who joined Tullow in April as General Manager Exploration.
Tullow's long term objective is to continue to build its business across each of its core areas through a mixture of exploration, development, acquisition and portfolio management. While the current environment for independent oil and gas companies is a competitive one, the Group continues to identify and have access to attractive opportunities. Performance to date in 2006 has been encouraging and I look forward to reporting further progress as the year unfolds. I would like to thank shareholders and employees for their continued support of the business.
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