Tullow Oil issued the following Trading Statement in respect of the first half of the 2008 financial year and this Operational Update in respect of recent Production, Development and Exploration activities.
The Trading Statement is in advance of the Group's Interim Results, which are scheduled for release on Wednesday, August 27, 2008.
- Mahogany-2 appraisal well on the Jubilee field in Ghana extends upside potential to 1.8 billion barrels.
- Jubilee and Odum have proved two new plays and de-risked substantial follow-up prospects scheduled for drilling in Ghana and Côte d'Ivoire within the next 12 months.
- Kingfisher-2 well in Uganda intersects zones encountered in Kingfisher-1, deep target results expected in August.
- Ugandan Butiaba campaign yields three more discoveries and opens up a new geological fairway.
- Four-well drilling campaign in India commenced in Block CB-ON/1 in late June
Production and Development:
- Group working interest production averaged 70,550 boepd for the first half of 2008 and is expected to average between 70,000 and 72,000 boepd for the full year.
- Jubilee production facilities tender under way and on track to achieve first oil target of 2010.
- Three deepwater rigs contracted for Ghana, next phase of drilling to commence in September.
- Early Production System in Uganda is expected to be sanctioned in the third quarter 2008.
Finance and Portfolio Management:
- Successful portfolio rationalisation in the first half of 2008 will raise approximately US$1 billion and a total anticipated profit on disposal after tax of approximately £400 million on completion.
- Capital expenditure in first half was £170 million, planned expenditure for 2008 is forecast to be £480 million.
- Net debt at 30 June 2008 was £420 million.
"Tullow has performed exceptionally well over the first half of 2008," said Tullow Chief Executive Aidan Heavey. "We have had solid production performance, outstanding appraisal results in Ghana, continued exploration success in Uganda and announced almost $1 billion worth of non-core disposals to enhance our financial and operational flexibility. These factors, combined with the unprecedented strength in oil and gas pricing and our ongoing exploration programs mean that Tullow has never been in a better position to enhance shareholder value."