Tullow's Exploration, Appraisal Success Drives Growth

Tullow has released an operational update for recent production, development and exploration activities.

Production and Development activities

  • Ugandan pre-emption and farmdown process well advanced, facilitating a basin-wide development plan, with a like-minded partner, best suited to the needs of the Government of Uganda.
  • First phase of Uganda Block 2 development program underway focused on appraisal drilling, extended well tests and the development of the Kasamene and Nzizi fields.
  • All aspects of the Phase 1 Jubilee development project are on schedule for fourth quarter first oil.
  • Working interest production averaged 58,300 boepd in 2009, in line with previous guidance, and is expected to average 55,000 to 57,000 boepd in 2010.

Exploration and Appraisal activities

  • Record 87% exploration and appraisal success rate in 2009; two successes year to date in 2010.
  • In Ghana, Tweneboa-2 appraisal well establishes Tweneboa as a major oil and gas-condensate field.
  • Up to 12 Equatorial Atlantic, 10 Ugandan and 8 wildcat wells planned for 2010 E&A program.

Group operations and financials

  • Full year 2009 capital expenditure of £690 million; forecast 2010 expenditure of £990 million, of which 25% is discretionary.
  • Net debt at 31 December 2009 was approximately £720 million.
  • Equity placing announced today1 to provide medium term growth capital.

Aidan Heavey, Chief Executive said, 2009 was another great year for Tullow. We de-risked our portfolio with material discoveries and consolidated our reputation as an exceptional explorer. The Jubilee development in Ghana remains on track and will firmly establish us as an offshore operator in Africa with the ability to deliver world-class projects. Today's equity placing and Ugandan farmdown will ensure that we have the right capital structure to deliver further material value for all stakeholders across our entire portfolio.

"Aligning interests in Uganda with a like-minded long-term partner represents a unique opportunity to create a basin-wide development plan that truly fulfils the needs and expectations of the Government of Uganda and its people.

"In the five extraordinary years since the Energy Africa acquisition in 2004, Tullow has become Africa's leading independent oil company. We have never been in a better position to deliver growth and create opportunities and we look forward to 2010 with confidence."