Tullow Oil plan investment in production

Tuesday, January 31 09:03:33

(BizWorld)

Capex will rise by 46pc to STG280 million this year, of which 80pc will go on its ongoing development projects in the UK, Gabon, Congo, Cote d'Ivoire, Equatorial Guinea, Pakistan and Bangladesh.

This will help bring output to another record 75,000 barrels of oil equivalent per day (boepd) by the end of 2006, taking the annual average to 68,000 boepd.

In 2005, volumes rose 44 pct to 58,450 boepd, reflecting additional output form the Horne and Wren fields in the North Sea.

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Tullow is currently producing around 66,000 boepd, with its UK gas output hitting an all-time high of 200 mln standard cubic feet per day. "The strong asset performance and production growth seen in 2005 is expected to continue with significant ongoing development projects in each of our core areas," said chief executive Aidan Heavey.

Additional volumes from the Schooner and Ketch fields, the Okume Complex and the M'Boundi, West Espoir, Bangora and Chachar fields will be onstream in the coming months.

On the exploration side, a further eight wells will be drilled, including three holes in the UK.

Drilling of the planned two appraisal wells on the Kudu gas field in Namibia will start early 2007.

As part of its accounting policy, Tullow said it is to write-off items relating to pre-license costs and failed exploration work, which in 2005 should reach STG25 million.

The group is also reducing its hedge positions in 2007 to 6,000 barrels of oil per day and 10 mmscfd of gas from 10,242 bopd and 81.7 mmscfd in the first half of 2006.

They were hedged at average prices of USD41 per barrel and 57.1 pence per therm for the first half of the year, and USD41.9 and 59.2 pence in 2007.