Tullow announced its intention to place up to 80,431,796 new ordinary shares in the Company, representing approximately 9.99% of Tullow Oil's existing issued ordinary share capital, with both new and existing institutional investors.
In January 2009, Tullow put in place a reserve based lending facility of US $2 billion and a new US $250 million revolving credit facility to fund the Jubilee Phase 1 development in Ghana and other existing mature production activities. In addition, Tullow raised £402 million in a placing of ordinary shares to fund its significant 2009 drilling campaign. Since that date, Tullow's business has continued to perform very strongly through 2009 and into 2010 as the exploration programme delivered further material successes in Uganda, Ghana and the Equatorial Atlantic region of West Africa; with an exploration success rate of 93 per cent. in Ghana and Uganda, and an overall result of 15 discoveries from 17 wells. Booked Commercial Reserves and Contingent Resources were significantly upgraded from 551 to 825 mmboe at the end of 2008 and are expected to be further upgraded for the year ended 2009.
The Group's producing and development assets are performing well with 2009 working interest production averaging 58,300 boepd. Jubilee development drilling and facilities fabrication remains on track to deliver first oil in the fourth quarter of 2010 which will be the first step in significantly upgrading the Company's production base.
Tullow's objective is to achieve an appropriate balance between a significant exploration and appraisal programme and the necessary level of production and development activity to fund the majority of the Company's operations. Until now the business has primarily been funded by a combination of operational cash flow, portfolio management and a reserve-based debt facility.
Aidan Heavey, Chief Executive Officer said, "Tullow is well positioned with two major world-class development assets in Ghana and Uganda which provide a strong platform for its long-term production growth. Importantly, we also have a significant and growing transformational exploration portfolio in West Africa and South America. Today's equity placing and planned Ugandan farmdown will ensure that we have the right capital structure to deliver further material value for all stakeholders across our entire portfolio."
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