{"id":12436,"date":"2022-07-13T10:42:13","date_gmt":"2022-07-13T10:42:13","guid":{"rendered":"https:\/\/www.oilnewskenya.com\/?p=12436"},"modified":"2022-07-13T10:50:49","modified_gmt":"2022-07-13T10:50:49","slug":"tullow-oil-provides-july-trading-statement-operational-update","status":"publish","type":"post","link":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-provides-july-trading-statement-operational-update\/","title":{"rendered":"Tullow Oil Provides July Trading Statement &#038; Operational Update"},"content":{"rendered":"<p><strong>Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented today:<\/strong><\/p>\n<p><i>\u201cIt is two years since I joined Tullow and today, we are in a very different place. A relentless focus on costs, capital discipline and operating performance is ensuring delivery of our business plan. We have also added unhedged production through the pre-emption in Ghana.<\/i><\/p>\n<p><i>Our current business plan is underpinned by assets that yield a deep portfolio of compelling investment opportunities. A continuing and comprehensive review of our resource base has identified additional opportunities to unlock material value, these include:<\/i><\/p>\n<ul>\n<li><i>Work on the TEN Enhancement Plan, which has identified significant upside to the current 2025 production target of c.50 kbopd (gross). A development concept is currently being finalised for the project, with detailed engineering expected to start later this year.<\/i><\/li>\n<li><i>Ghana\u2019s gas demand is expected to continue growing strongly, supporting economic development and growth of industry. We have identified approximately 2 TCF of gas resources in Jubilee and TEN. This indigenous resource has the potential to provide energy security for Ghana, while reducing dependence on the highly competitive global LNG market. We are preparing an integrated plan for the rapid development of this material resource.<\/i><\/li>\n<\/ul>\n<p><i>We also continue to make progress on securing a strategic partner for Project Oil Kenya, which has the potential to be a key driver of growth, value and diversification for Tullow.<\/i><\/p>\n<p><i>Each of these projects has the potential to deliver material returns on capital and further enhance our production and cashflow generation. The proposed merger with Capricorn is an important enabler for a new business plan of the combined group, leveraging the combined resources of both companies and underpinned in part by the accelerated implementation of these projects. With a new business plan, pre-tax cost synergies of $50 million per year, the opportunity to drive down cost of capital and further optimise capital allocation, the combined group will be well positioned to play a leading role in the African energy sector, delivering material value for all shareholders and our host nations. We are preparing a circular and prospectus for shareholders in connection with the proposed merger with Capricorn which we expect will be available in the fourth quarter ahead of a shareholder vote on this proposed merger expected towards the end of the year.\u201d<\/i><\/p>\n<p><strong>Merger with Capricorn Energy<\/strong><\/p>\n<p>On 1 June 2022 Tullow announced that it had reached agreement with Capricorn Energy on the terms of an all-share merger to create a leading African energy company with a material and diversified asset base and a portfolio of investment opportunities delivering visible production growth. This proposed merger will realise meaningful cost synergies and deliver a combined group with robust cash generation and a resilient balance sheet. It will also have a sustainable capital returns programme and a deep commitment to environmental stewardship, social investment, development of local content and its national workforces.<\/p>\n<p><strong>Strategic Update<\/strong><\/p>\n<p>Tullow has performed well in the first half of the year and has built on the progress that the Group made in 2021. Production in the first half of the year was in line with expectations and drilling performance across the portfolio was strong.<\/p>\n<p>Tullow outlined a number of critical actions for 2022 in its recent Annual Report, and is pleased to report that it has made significant progress on these:<\/p>\n<ul>\n<li>The pre-emption of the sale by Occidental Petroleum to Kosmos Energy of its interests in the Jubilee and TEN fields in Ghana was completed successfully in March, adding c.4 kbopd of unhedged production.<\/li>\n<li>On 1 July 2022 Tullow took over the Operation &amp; Maintenance (O&amp;M) of the Jubilee FPSO from MODEC. This is part of a major transformation plan to make the assets in Ghana more efficient and cost-effective, notably sustaining strong FPSO uptimes and targeting further operating cost reductions.<\/li>\n<li>Tullow and its Partners are in discussions with the Government of Ghana regarding the development of the material resources of c.2 TCF of associated and non-associated gas located in Jubilee and TEN. This will be an important contributor to the long-term energy security of the country.<\/li>\n<li>A confidential process to secure a strategic partner for the material development project in Kenya continues and Tullow is confident that it will make substantial progress in the second half of the year.<\/li>\n<\/ul>\n<p><strong>Operational Update<\/strong><\/p>\n<p>Full year Group production guidance has been maintained at 59-65 kboepd, inclusive of incremental production from the successful pre-emption in Ghana.<\/p>\n<p><b>In Ghana<\/b>, the ongoing drilling programme, that started in April 2021 has delivered seven new wells, six at Jubilee and one at TEN, at an average cost of less than $50 million per well, more than 10% below the average expected cost for these wells. In addition, two existing wells have been completed, one at Jubilee (J12-WI) and one at TEN (En16-WI).<\/p>\n<p>The Jubilee field has performed well with production of c.82.4 kbopd gross (c.30.8 kbopd net) in the first half of the year, in line with expectations. This year two new water injection wells and one new producer well have been drilled and brought onstream in the Jubilee field, helping to offset natural decline. The current pace of drilling in Ghana is expected to result in an acceleration of the next phase of drilling at Jubilee into the fourth quarter of 2022. These wells will be tied into the Jubilee South East infrastructure in 2023.<\/p>\n<p>The TEN fields produced c.24.3 kbopd (c.12.5 kbopd net) in the first half of the year. No new wells were drilled in TEN in the first half of 2022, however active reservoir management has helped slow the natural decline. A previously drilled water injection well at Enyenra (En16-WI) has been completed and will come onstream later this year to provide pressure support for existing producers. A further Enyenra producer is planned to be drilled and completed later this year. The rig is currently drilling the first of the two strategic Ntomme Riser Base producer wells, which are due to be tied in and brought onstream in the second half of 2023, following installation of a Riser Base manifold.<\/p>\n<p>Production performance has also been supported by strong FPSO uptime of c.99% at TEN and c.95% at Jubilee, including a planned maintenance shutdown of the Jubilee FPSO, which was successfully completed in May. On 1 July 2022, Tullow took over Operations and Maintenance (O&amp;M) of the Jubilee FPSO from MODEC.<\/p>\n<p><b>In Gabon<\/b>\u00a0the Simba expansion project has resulted in increased production from the Simba field of c.6.0 kbopd net to Tullow in the first half of the year. A long-term appraisal well test at the Tchatamba field is on track to start in August, and infill drilling campaigns at the Ezanga and Oba fields are progressing to plan.<\/p>\n<p><b>In C<\/b><b>\u00f4te d\u2019Ivoire<\/b>, production from the Espoir field averaged c.2.1 kboepd in the first half of the year. A two-month shutdown which had been planned for March has been postponed to August. Required cargo tank maintenance work is progressing well and Tullow continues to engage with the operator, CNR International, on identifying development drilling opportunities.<\/p>\n<p>Total net production from the non-operated portfolio in Gabon and C\u00f4te d\u2019Ivoire averaged c.17.6 kboepd in the first half of the year, in line with expectations.<\/p>\n<p><b>In Kenya<\/b>, as reported above, the Joint Venture Partners continue to make good progress with the farm-down to a strategic partner and the approval of the Field Development Plan (FDP) for Project Oil Kenya. The project is expected to be a key driver of growth, value and diversification for Tullow.<\/p>\n<p align=\"left\"><strong>Financial update<\/strong><\/p>\n<p>In February, Tullow received $75 million in contingent consideration in relation to Tullow&#8217;s sale of its assets in Uganda to TotalEnergies, which completed in November 2020. Tullow will continue to have exposure to the Tilenga Project through additional cash consideration which may be received in the form of contingent payments if the average annual Brent price exceeds $62\/bbl once production commences.<\/p>\n<p>In March, Tullow completed the pre-emption related to the sale of Occidental Petroleum&#8217;s interests in the Jubilee and TEN fields in Ghana to Kosmos Energy for a total consideration of $126 million, consisting of $118 million upfront and a subsequent post-completion adjustment payment of $8 million. The transaction took Tullow&#8217;s equity interests to 39.0% in the Jubilee field and to 54.8% in the TEN fields and added c.4 kbopd of annualised unhedged production to Tullow\u2019s portfolio for 2022. At current oil prices it is expected that this acquisition of additional equity in the Jubilee and TEN fields will have paid for itself by the end of the year.<\/p>\n<p>The Group generated revenue, including the cost of hedging, of c.$0.8 billion in the first half of the year, with a realised oil price of c.$106\/bbl before hedging and c.$87\/bbl after hedging. Capital expenditure in the first half of the year was c.$155 million.<\/p>\n<p>Taking into account the contingent consideration ($75 million inflow), the arbitration payment ($76 million outflow) and the pre-emption payment ($126 million outflow), and after adjusting for revenues of over $200 million relating to two Ghana liftings which took place in early June but for which cash was received shortly after 30 June 2022, on 1 and 5 July respectively, free cash flow<sup>1<\/sup>\u00a0in the first half of the year was neutral.<\/p>\n<p>Full year capital expenditure is expected to be c.$380 million, including c.$30 million related to the additional equity interests in Ghana. Full year free cash flow<sup>1<\/sup>\u00a0guidance remains c.$200 million assuming an average oil price of $95\/bbl.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented today: \u201cIt is two years since I joined Tullow and today, we are in a very different place. A relentless focus &hellip; <a href=\"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-provides-july-trading-statement-operational-update\/\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":24,"featured_media":7550,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[7447,7442,7443,11,7444],"tags":[420,10590,10592,944,997,8950,1252,10593,10591,10594,2571],"class_list":["post-12436","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-central-africa","category-countries","category-eastern-africa","category-top-news","category-west-africa","tag-cote-divoire","tag-espoir-field","tag-ezanga","tag-gabon","tag-ghana","tag-jubilee","tag-kenya","tag-oba","tag-tchatamba-field","tag-ten","tag-tullow-oil","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2019\/02\/Tullow-Oil.jpg?fit=713%2C476&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5JWkQ-3eA","jetpack-related-posts":[{"id":11632,"url":"https:\/\/www.oilnewskenya.com\/index.php\/ghana-tullow-oil-contracts-navy-to-provide-security-to-jubilee-ten-fields\/","url_meta":{"origin":12436,"position":0},"title":"Ghana: Tullow Oil Contracts Navy to Provide Security to Jubilee &#038; Ten Fields","author":"","date":"January 17, 2022","format":false,"excerpt":"Tullow Ghana and the Ghana Navy have signed a Memorandum of Understanding for the contracting of Ghanaian Navy vessels worth $23.5million-dollars to provide security services in the Jubilee and TEN oil fields over the next five(5) years. Speaking at the signing ceremony, Deputy Managing Director of Tullow Ghana, Cynthia Lumor\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2022\/01\/Tullow-Ghana-Navy.jpg?fit=1024%2C682&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2022\/01\/Tullow-Ghana-Navy.jpg?fit=1024%2C682&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2022\/01\/Tullow-Ghana-Navy.jpg?fit=1024%2C682&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2022\/01\/Tullow-Ghana-Navy.jpg?fit=1024%2C682&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":10164,"url":"https:\/\/www.oilnewskenya.com\/index.php\/ghana-tullow-starts-multi-well-drilling-campaign\/","url_meta":{"origin":12436,"position":1},"title":"GHANA: Tullow Starts Multi-well Drilling Campaign","author":"","date":"April 6, 2021","format":false,"excerpt":"Tullow Oil has announced the start of a multi-year, multi-well drilling campaign offshore Ghana with the commencement of drilling of the first well at the Jubilee Field yesterday. As previously announced, the Maersk Venturer, which has been contracted for four years, is expected to drill four wells in total in\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/04\/jubilee-field.jpg?fit=560%2C315&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/04\/jubilee-field.jpg?fit=560%2C315&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/04\/jubilee-field.jpg?fit=560%2C315&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":10609,"url":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-provides-operational-update\/","url_meta":{"origin":12436,"position":2},"title":"Tullow Oil Provides Operational Update","author":"","date":"July 20, 2021","format":false,"excerpt":"Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented today: \u201cI am pleased to report that Tullow has made excellent operational and financial progress in the first half of 2021. Our producing fields in West Africa are performing well and we have successfully started our drilling programme in Ghana. This\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/07\/Tullow-Operations-Africa.jpg?fit=417%2C347&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":10931,"url":"https:\/\/www.oilnewskenya.com\/index.php\/ghana-tullow-ceo-says-company-in-strong-position-to-execute-the-value-maximization-plan\/","url_meta":{"origin":12436,"position":3},"title":"GHANA: Tullow CEO Says Company in Strong Position to Execute the Value Maximization plan","author":"","date":"September 28, 2021","format":false,"excerpt":"The leadership of Tullow Oil Plc, led by CEO Rahul Dhir, paid a courtesy call on the Vice President, H.E. Dr. Mahamudu Bawumia on Monday 27th September 2021 at the Jubilee House in Accra. The Executives shared with H.E. the Vice President Tullow\u2019s renewed Corporate Strategy and purpose, which is\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/09\/Ghana-Tullow-CEO.jpg?fit=1080%2C533&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/09\/Ghana-Tullow-CEO.jpg?fit=1080%2C533&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/09\/Ghana-Tullow-CEO.jpg?fit=1080%2C533&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/09\/Ghana-Tullow-CEO.jpg?fit=1080%2C533&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2021\/09\/Ghana-Tullow-CEO.jpg?fit=1080%2C533&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":11706,"url":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-to-concentrate-on-it-producing-assets-in-2022\/","url_meta":{"origin":12436,"position":4},"title":"Tullow Oil to Concentrate on it Producing Assets in 2022","author":"","date":"January 26, 2022","format":false,"excerpt":"2022 Outlook Group working interest oil production guidance is 55 to 61 kboepd. This forecast is based on Tullow\u2019s existing equity interests in TEN (47.175%) and Jubilee (35.48%) and will be adjusted following completion of the pre-emption of the sale of Occidental Petroleum\u2019s interest in Ghana to Kosmos Energy. The\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/08\/Tullow-Oil.jpg?fit=699%2C466&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/08\/Tullow-Oil.jpg?fit=699%2C466&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/08\/Tullow-Oil.jpg?fit=699%2C466&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":12286,"url":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-ceo-issues-statement-ahead-of-agm\/","url_meta":{"origin":12436,"position":5},"title":"Tullow Oil CEO Issues Statement Ahead of AGM","author":"","date":"May 25, 2022","format":false,"excerpt":"Our company now has solid financial and operational foundations with a well-defined opportunity set to drive growth and create value. With new leadership at the Board, we are now well-placed to build on these firm foundations to achieve our ambitions in the African oil and gas sector and fulfil our\u2026","rel":"","context":"In &quot;Countries&quot;","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/08\/Tullow-Oil.jpg?fit=699%2C466&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/08\/Tullow-Oil.jpg?fit=699%2C466&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/08\/Tullow-Oil.jpg?fit=699%2C466&ssl=1&resize=525%2C300 1.5x"},"classes":[]}],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/12436","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/comments?post=12436"}],"version-history":[{"count":3,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/12436\/revisions"}],"predecessor-version":[{"id":12439,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/12436\/revisions\/12439"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media\/7550"}],"wp:attachment":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media?parent=12436"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/categories?post=12436"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/tags?post=12436"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}