Formal notice has been received from Sonangol E.P., the National Oil Company of the Republic of Angola, that Tullow has been awarded a 50% operating interest in Block 1/06, a 3,800 sq km oil exploration concession in the Lower Congo Basin, offshore Angola. Tullow expects to enter into a Production Sharing Contract with Sonangol E.P. in August 2006. A signature bonus of $US10 million will be payable by the joint venture group.
Block 1/06, which extends from a water depth of 40m to approximately 300m, contains three undeveloped oil fields, Pitangueira, Bananeira, and Sapesapeiro. Tullow's initial objective will be to evaluate the commerciality of these discoveries by drilling two wells on two of the structures in late 2007. As part of the further work program, a 600 sq km 3D seismic survey will be conducted and a third exploration well will be drilled during the first four-year period to test prospective intervals.
Oil production from the first West Espoir development well, in which Tullow has a 21.33% interest, commenced on July 26, 2006. This well, the first of five production wells, came onstream at a production rate in excess of 5,000 boepd, significantly ahead of expectations.
The development project, sanctioned in May 2004, includes a new wellhead tower tied back via a 5.5 km pipeline to the Espoir FPSO where fluids produced from East and West Espoir are co-mingled and processed using the existing facilities. Together the two fields are currently producing over 35,000 boepd.
The rig will now drill four further production wells and two water injection wells. The West Espoir project remains within budget and is on schedule to reach peak production of 10,000 boepd in late-2007.
"We are delighted to further expand our offshore Angola portfolio with the addition of this prospective acreage with both development and exploration opportunities," said Aidan Heavey, Tullow's chief executive. "We look forward to continuing to develop our Angolan business over the coming months and years. First oil from the West Espoir development continues the strong organic production growth already seen from the Group this year, building steadily towards our target of 75,000 boepd by year end."
Tullow is a leading independent oil & gas, exploration, and production group, quoted on the London and Irish Stock Exchange. It has interests in approximately 90 exploration and production licenses in 15 countries and focuses on three core areas: Northwest Europe, Africa, and South Asia.
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