Tullow 1H Revenue Seen Boosted By Jubilee, Higher Oil Price

LONDON (Dow Jones Newswires), July 5, 2011

Tullow Oil said it expects to post record first-half revenue of $1.05 billion next month, as the London-based explorer continues to ramp up production from its Jubilee field offshore Ghana to 80,000 barrels of crude a day, a 14.3% increase from the level announced last month.

In a trading update, Tullow said first-half working interest production has averaged 75,350 barrels of oil equivalent a day, an 35% increase from the 55,800 boe/day logged in the corresponding period in 2010.

For the full year, Tullow said it expects to produce 90,000 to 94,000 boe/day, more than 50% higher than last year, boosted by new licenses in Ghana and the North Sea acquired earlier this year.

"The performance of our business since the beginning of 2011 has been excellent and we expect to deliver record financial results for the first half of the year," said Chief Executive Aidan Heavey.

Tullow said it expects total first-half revenue of around $1.05 billion, compared with $486 million for the same period in 2010, attributing the sharp rise to higher sales volumes thanks to the contribution of Jubilee, its largest discovery and which is expected to reach plateau production of 120,000 barrels a day in August.

The company's anticipated surge in revenue has also been underpinned by "significantly higher" oil and gas prices, the company said, adding that its oil production sold at an average discount of approximately 2% to Brent during the first half of 2011.

Analysts said while the trading update didn't contain any surprises, it did confirm Tullow's growth program remains on track.

Angus McPhail said it was further evidence "that Tullow is graduating from E&P to integrated player," while Oriel Securities' Richard Rose said its diverse exploration portfolio had "considerable upside potential."

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