REG - Tullow Oil PLC Tullow Oil PLC - FP Tullow Oil PLC - NP - Trading Statement

Tullow OilAnnouncement

17/11/2021 07:00

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RNS Number : 5899S  Tullow Oil PLC  17 November 2021

TULLOW OIL PLC
November trading update

17 NOVEMBER 2021 - Tullow issues the following statement to provide an update
on its ongoing operations and expectations for the full year. The information
contained herein has not been audited and may be subject to further review and
amendment.

Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented today:

"We have delivered strong operational performance across both Jubilee and TEN
this year and the Ghana drilling programme continues to be successful. Our
decision to pre-empt Kosmos Energy's acquisition of Occidental Petroleum's
interests in the Deep Water Tano (DWT) licence underscores our belief in the
value and growth potential of our assets in Ghana. Elsewhere, the process to
find a strategic partner in Kenya is progressing well and we have had success
through selective infrastructure-led exploration with the Wamba well in Gabon.
Finally, I am pleased to have welcomed Phuthuma Nhleko into the Tullow team as
Chairman-designate and we look forward to working with him over the coming
years as we execute our strategy and reach Net Zero by 2030."

 

OPERATIONAL UPDATE

Production

·      Group working interest production averaged 59,400 boepd to end
October 2021, in line with expectations.

·      Full year production guidance remains unchanged with a range of
58,000-61,000 boepd.

·      Production guidance for next year will be provided in Tullow's
Trading Statement in January 2022 after work programmes and budgets are agreed
with Joint Venture (JV) Partners across Tullow's portfolio.

Ghana

·      Ghana drilling campaign on track, with three of the four wells
planned in 2021 now onstream.

·      Significant improvement in operating performance sustained:
combined uptime on both FPSOs is averaging c.97%; gas offtake from the
Government of Ghana is averaging c.110 mmscfd; water injection rates on
Jubilee are in excess of 200 kbwpd.

·      Tullow has exercised its right of pre-emption related to the sale
of Occidental Petroleum's interests in the Jubilee and TEN fields in Ghana to
Kosmos Energy. As a result, Tullow's equity interests are expected to increase
to 38.9% in the Jubilee field and 54.8% in the TEN fields. Completion of the
transaction remains subject to finalising definitive agreements with Kosmos
Energy/Anadarko WCTP Company and gaining approval from the Government of
Ghana. (See release
(https://www.tullowoil.com/media/press-releases/tullow-pre-emption-deep-water-tano-component-kosmos-energyoccidental-petroleum-ghana-transaction/)
).

Jubilee

·      Jubilee is currently producing c.28,700 bopd net to Tullow (gross
c.81,000 bopd).

·      Two new wells have been brought onstream this year (producer
J56-P in July and water injector J55-WI in September). A third Jubilee well
(producer J57-P) is due onstream in December 2021, ahead of schedule, and is
expected to increase gross production from the Jubilee field to over 85,000
bopd.

·      The Jubilee FPSO maintenance shutdown originally scheduled for
September 2021 is now forecast to take place in April 2022. The shift allows
the work scope to be optimised and gas enhancement works previously planned
for a 2023 shutdown to be accelerated. An expected easing in COVID-19
restrictions should support a more efficient work programme.

TEN

·      TEN is currently producing c.13,200 bopd net to Tullow (gross
c.28,000 bopd).

·      A gas injector (Nt06-GI) came onstream in October 2021 and is
providing pressure support to existing Ntomme wells. Nt06-GI also encountered
oil at the base of the well, de-risking the development potential of areas
further to the north of Ntomme.

Non-operated

·      Production guidance for the non-operated portfolio is c.17,000
bopd net to Tullow for the full year, in line with expectations.

·      In Gabon, the Simba expansion project has made good progress with
a successful infill well brought onstream in September 2021. A new 10-inch
pipeline, which will allow increased offtake from the field, is expected to be
operational in December 2021.

·      In Côte d'Ivoire, the Espoir field is now back in production
following an extended shutdown. Tullow continues to work with the Operator
(CNR) to help prepare a remediation plan for the FPSO.

Kenya

·      Following the submission of a draft Field Development Plan (FDP)
to the Government over the summer, Tullow and its JV Partners have been
working collaboratively with the Ministry of Petroleum & Mining to
incorporate feedback and plan to submit a final FDP by the end of 2021 in line
with licence commitments.

·      As previously announced, the JV Partners are actively seeking a
strategic partner for the project and constructive discussions continue with
interested parties.

Exploration

·      In Gabon, selective infrastructure-led exploration has led to the
Wamba discovery which is adjacent to the non-operated Tchatamba South oil
field. The discovery has the potential to deliver oil production from
mid-2022, subject to capital allocation and budget decisions.

·      In the emerging basins of Guyana and Argentina the focus remains
on unlocking value from the substantial prospective resource base whilst
seeking to reduce the Group's capital exposure.

·      In Guyana, the Kanuku JV Partners plan to drill the Beebei-Potaro
commitment well in mid-2022, targeting in excess of 200 mmbbls gross mean
unrisked prospective resources across two targets.

·      Following the GVN-1 well result, the JV Partners have notified
the Government of Suriname that they have elected not to enter into the next
phase of Block 47, and Tullow will exit this licence on 31 December 2021.
Tullow has also decided to exit Block 54 at year end.

 

FINANCIAL Update

·    Full year Group capital expenditure is expected to be c.$265 million
(previously c.$260 million), adjusted to take account of revised Kenya
expenditure.

·    Full year underlying operating cashflow(1) is expected to be c.$600
million, and free cash flow is forecast to be c.$100 million, subject to
year-end working capital movements, and excluding any consideration received
in respect of Uganda.

·    Tullow is set to receive $75 million from Total following a Final
Investment Decision (FID) for the Lake Albert Development in Uganda. Whilst
Tullow understands that both CNOOC and Total have now taken FID, it is
uncertain whether the final parliamentary approval will be received before
year end. Therefore, this payment may occur in early 2022.

 

 Hedge portfolio as of 16 November         2021     2022     2023     2024
 Hedged volume (bopd)                      40,000   39,254   30,588   10,446
 Weighted average floor protected ($/bbl)  $48/bbl  $51/bbl  $55/bbl  $55/bbl
 Weighted average sold call                $67/bbl  $77/bbl  $74/bbl  $74/bbl
 Premium spend per barrel ($/bbl)          ($2.6)   ($2.0)   ($2.0)   ($2.0)

 

BOARD UPDATE

On 25 October, Phuthuma Nhleko joined the Board as a non-executive Director
and Chairman-designate of Tullow. Phuthuma will take over as Chair of Tullow
from Dorothy Thompson, CBE, at the end of December 2021, at which point
Dorothy will retire from the Board.

---------------------------

 CONTACTS
 Tullow Oil plc                                Murrays

 (London)                                      (Dublin)

 (+44 20 3249 9000)                            (+353 1 498 0300)

 George Cazenove (Media)                       Pat Walsh

 Nicola Rogers and Matthew Evans (Investors)   Joe Heron

Notes to editors

Tullow is an independent oil & gas, exploration and production group,
quoted on the London, Irish and Ghanaian stock exchanges (symbol: TLW). The
Group has interests in over 40 exploration and production licences across 11
countries. In March 2021, Tullow committed to becoming Net Zero on its Scope 1
and 2 emissions by 2030.

Follow Tullow on:

Twitter: www.twitter.com/TullowOilplc (http://www.twitter.com/TullowOilplc)

YouTube: www.youtube.com/TullowOilplc (http://www.youtube.com/TullowOilplc)

Facebook: www.facebook.com/TullowOilplc (http://www.facebook.com/TullowOilplc)

LinkedIn: www.linkedin.com/company/Tullow-Oil
(http://www.linkedin.com/company/Tullow-Oil)

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