Tullow has issued a trading update, covering drilling and development activity in its core operations and discussing its financial capacity for 2015 and beyond. The shares rallied gently on the news.
Full year average West African oil production now expected to be 66-67,000 bopd. Jubilee expected to average around 100,000 bopd gross.
TEN development project in Ghana is around 75% complete and on schedule and on budget to deliver first oil in mid-2016.
36,011 bopd of 2016 Group oil net entitlement volumes hedged with an average floor price protection of around $75.5/bbl.
Kenya and Uganda development plans progressing; South Lokichar appraisal activity underpins current resource estimates of around 600mmbo.
Kenya basin drilling: Emesek-1 well spudded Oct in the North Lokichar Basin; Cheptuket-1 well to spud in Q1 2016 following Etom-2 exploratory appraisal well.
Successfully farming down for carries in our higher equity licences.
2016 capex now expected to be approximately $1.2 billion, a reduction of $700m on 2015 spend.
CEO Aiden Heavey commented that despite a difficult year, Tullow has taken steps to meet the challenges of a low oil price environment. Their West African assets are on course to deliver around 100,000 bopd net to Tullow by 2017. Costs have been cut and funding secured to meet Tullow's development commitments. Once production from TEN commences in mid-2016, Tullow expect to begin to reduce debt. In East Africa, Tullow expect to take Final Investment Decisions in Kenya and Uganda in 2017. Tullow is focused on generating steady cash flow from operations, bringing TEN onstream, to budget, maintaining adequate liquidity and building the prospect inventory for future exploration.
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