Tullow confirms viability of well in Kenya
TULLOW Oil has confirmed the commercial viability of its latest drilling success at the Etuko-1 well in Kenya and said that combined with output from neighbour Uganda, a pipeline could deliver 500,000 barrels a day by 2018.
The Irish-owned, African-focused company also confirmed it is to seek a "development carry" from any future partner in its Ten project in Ghana, where the new investor would pay development costs.
It put the increased cost of developing Ten at $4.9bn (€3.7bn), excluding lease costs.
Tullow has had some disappointing exploration results recently but Morgan Stanley said the result was ahead of expectations and that the opening of a new province in East Africa and signs of capital discipline "should address investor concerns and help to drive the shares up".
Production at the Irish-owned African-focused mining company jumped in line with expectations, up 14pc. Tullow pumped 88,600 barrels of oil a day between January and June.
But the group still cut its 2013 average production forecast; it now expects to produce an average of 84,000 to 88,000 barrels of oil per day as opposed to a previously predicted 86,000 to 92,000 barrels.
Profit before tax were $486m, in-line with analyst estimates. The company wrote off $176m on exploration costs during the period, well below the $451m it paid out in the first half of 2012.