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Tullow Oil plc (Tullow) issues this Trading Statement and Operational Update in respect of the first half of the 2012 financial year ended 30 June 2012. This is in advance of the Group’s Half-Yearly Results, which are scheduled for release on 25 July 2012. The information contained herein has not been audited and is subject to further review.
Commenting, Aidan Heavey, Chief Executive Said:
“Tullow’s industry-leading exploration success has continued in the first half of 2012 with a major discovery in Kenya, the fourth new basin the Group has opened in five years. We have also completed the $2.9 billion farm-down in Uganda, and made good progress on our development projects in Ghana and Uganda. The on-going remediation of the Jubilee field is progressing well and significant exploration wells are planned for the East African Rift basins, the West African Transform Margin and the twin basins in South America in the second half of 2012. With an exciting programme ahead, Tullow is well placed for continued success over the remainder of the year.”
The Jubilee field has continued to deliver industry-leading operational and safety performance with 98% uptime and zero lost time incidents to date in 2012. In the first half of the year, field production has averaged 63,100 bopd gross and is currently producing at approximately 63,000 bopd gross with a number of wells temporarily offline for ongoing acid stimulation activity. Significant increases are expected in the second half of 2012 as the benefit of the acidisation programme is realised and new Phase 1A wells are brought onstream. Jubilee field production is expected to average between 70,000 and 80,000 bopd gross in 2012, underpinned by the successful remediation programme. The field is expected to exit 2012 with a gross production rate in excess of 90,000 bopd as it ramps up to plateau production in 2013.
As the projected production figures show, the remedial work to address the decline in productivity from some of the Jubilee wells has progressed well. Acid stimulations have now been completed on three of the Phase 1 production wells and these wells are producing steadily at increased rates. Acid stimulations have proven to be a cost effective solution to remediating the wells and therefore three more are planned for this year. No further sidetracks or recompletions are planned as part of the remediation program.
The Phase 1A development project is progressing as planned with two production wells and one injector well drilled. Well completion and commissioning operations will continue through the second half of 2012 and first production is expected in the fourth quarter of 2012.
TEN project appraisal drilling and well testing, to support the Plan of Development (PoD), has continued to progress well. In May 2012, the Ntomme 2A appraisal well was successfully completed and flow tests in both the upper and lower reservoir zones recorded a combined rate of around 20,000 bopd. Following the flow tests, gauge readings were taken at the Tweneboa 3ST well (the Ntomme discovery well) which confirmed reservoir continuity.
Development work on the TEN project, which includes the FPSO design competition, subsea FEED and associated tendering remains on track for the PoD to be submitted to the Minister of Energy during the third quarter of 2012.
Exploration drilling activity is ongoing in the Deep Water Tano licence with the drilling of the Wawa-1 well, which is expected to reach total depth in July 2012. On completion of Wawa-1, the Okure and Sapele exploration wells will be drilled prior to the exploration licence expiry in January 2013.
In the West Cape Three Points licence, the Teak-4 appraisal well encountered thin non-commercial reservoirs and has been plugged and abandoned. Discussions are on-going in relation to further appraisal and development plans for the Mahogany, Teak, Akasa and Banda discoveries.
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