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.”
In February 2012, Tullow signed two Production Sharing Agreements (PSAs) relating to the Lake Albert Rift Basin with the Government of Uganda, enabling the completion of the farm-down to CNOOC and Total for a total headline consideration of $2.9 billion. Tullow, CNOOC and Total have now completed joint technical work to define the conceptual basin development plan. This involves the delivery of production volumes in excess of 200,000 bopd, options for a refinery to supply petroleum products to the local market as well as pipeline export routes to international markets. Tullow and its partners are now discussing the plans with the Government of Uganda and preparing for the next phase of pre-project definition. Major production from the Lake Albert Rift Basin is expected approximately 36 months after the plan for the basin-wide development has been approved by the Government of Uganda.
In March 2012, Tullow submitted revised field development plans for the Nzizi and Mputa fields to supply gas and crude oil to the domestic power market ahead of the full basin development. The government has also given its support for the sale of small quantities of crude oil, produced by well testing, to local industry. This is likely to start in early 2013.
Exploration and appraisal activities across the basin have ramped up significantly since February 2012 with four rigs currently active. The programme includes up to 20 exploration and appraisal wells, well testing and the acquisition of further 3D seismic and gravity data.
In EA-1 (operated by Total), a significant programme of activity is under way including appraisal and testing on the Jobi-Rii, Ngiri, Mpoyo, Gunya and Jobi-East wells. Exploration activity will commence later in the year after further seismic acquisition to high-grade well locations. A fifth rig is currently being sourced for this campaign, with material exploration prospects including Omuka and Raa.
In EA-2 (operated by Tullow), the Kigogole/Nsoga/Ngege/Ngara (KNNN) appraisal work continues on schedule with the Ngege-3, 4, 5 and 6 wells all completed and the final Ngege-7 field appraisal well due to commence soon. Testing activities have also progressed over the first half of the year with the successful completion of operations on the Kigogole and Kasamene fields.
The Kanywataba exploration well (operated by CNOOC), in the southern part of the Lake Albert Rift Basin, commenced in May 2012 and results of drilling, wireline logging and sampling show that the reservoir is water bearing. This wildcat well was drilled 20km from the nearest well control. This was the last exploration well in the southern part of the basin with this exploration licence expiring in August.