independent

Saturday 19 April 2014

Tullow pledges Ghana updates after licence partner pulls out

Tullow Oil said it would provide further updates today on its operations in Ghana after a partner said it was pulling out of a jointly-owned licence area there.

Tullow was forced to make a statement yesterday after partner Kosmos announced it had relinquished a discovery area associated with the Banda find on the West Cape Three Points Block because it wasn't commercially viable.

Tullow, which is also due to release its full-year financial results today, has huge operations in Ghana which have suffered setbacks in recent years.

Tullow has long targeted 120,000 barrels a day of output at its Jubilee field in Ghana, and had once hoped to reach that by 2011. The company recently said it was now producing 110,000 barrels a day.

Kosmos, an oil explorer backed by Warburg Pincus and Blackstone, saw shares fall as much as 6.2pc yesterday after it announced the news and a share offering. Shares in Tullow were little changed, closing up 0.9pc at 11.80 in London yesterday.

Discoveries

Kosmos reported that it had submitted a declaration of commerciality and plan of development for three discoveries on the Deepwater Tano Block offshore Ghana.

It said that the plan of development for the three discoveries was for a flexible and expandable development, with an initial base capacity of 80,000 barrels of oil per day.

Tullow has disappointed investors recently with poor news from Uganda and Kenya. Reuters reported earlier this year that Tullow has a record 49 wells planned this year, and drilling engineers are under pressure after a disappointing trading update.

After a mixed year for one of the industry's best performing drillers of recent times, Tullow's output guidance for 2013 at 86,000-92,000 barrels of oil equivalent per day came in below some analysts' forecasts, and its 2012 output at 79,200 barrels undershot company guidance.

Some investors have begun to worry it is losing that focus, especially since December when it bought Norwegian driller Spring Energy, and attendees at a Macquarie investment conference this week expressed a desire to see it maintained.

Irish Independent

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